Bank of England Governor Mark Carney released a list of initiatives on June 19, which included giving an update on BOE’s attitude towards Facebook’s forthcoming coin Libra.
Libra Causing Regulatory Concerns
Facebook has created a stir in recent weeks over the official announcement of Libra. The stablecoin is designed to function through the social media platform and its messaging service, allowing users the ease of sending online payments.
Facebook is making its boldest move yet with the launch of Libra. | Source: Pixabay
However, the broader community of cryptocurrency remains skeptical. Some have pointed out that Libra, given its centralized ties to Facebook, will constitute a digital asset rather than cryptocurrency.
Regulators have likewise taken notice of Facebook’s development. The US Senate will be holding a hearing next week to discuss Libra, with David Marcus, Vice President of Facebook Messaging, reportedly in attendance.
Facebook has too much power and a terrible track record when it comes to protecting our private information. We need to hold them accountable—not give them the chance to access even more user data. #BreakUpBigTech https://t.co/eQr06VMMyx
— Elizabeth Warren (@ewarren) June 19, 2019
Bank of England Optimistic About Libra
BOE Governor Mark Carney issued a statement on Thursday saying that the central bank is holding an “open mind but not an open door” towards Libra.
However, he was careful to point out the utility of digital assets and the role they could play in global transactions. Carney highlighted cost-savings in cross-border transactions as a potential benefit of Libra.
Carney continued,
“Libra, if it achieves its ambitions, would be systematically important.”
The BOE Governor cautioned that, despite the potential for innovation, Libra would be held to the highest standards of regulation and consumer protection, emphasizing the need for protections against money laundering.
Support for Libra Growing
While regulators may be imposing a harsh standard on Libra, some are beginning to see the technology as a win for the industry of cryptocurrency.
Erik Vorhees, a long-time bitcoin proponent, took to Twitter to explain that Libra represents validation for crypto-assets even if it fails at being a cryptocurrency
2/ I know, I know, “it’s not a cryptocurrency!!!” some will yell. Well, yes and no. Relative to PayPal or to the US dollar, Libra is very much a cryptocurrency. Relative to Bitcoin or ZCash or DAI, Libra is not all that crypto-y.
— Erik Voorhees (@ErikVoorhees) June 18, 2019
Andreas Antonopoulos also gave a nod towards Libra in putting pressure on the banking system.
While Facebook's Libra doesn't compete against any open, public, permissionless, borderless, neutral, censorship-resistant blockchains, it *will* compete against both retail banks and central banks. This is going to be fun to watch.
— Andreas M. Antonopoulos (@aantonop) June 18, 2019
As opposed to being a ‘bitcoin-killer,’ Libra could ultimately have the effect of drawing greater attention to crypto-assets.
