Facebook’s recently-announced cryptocurrency project, Libra, continues to make headlines as high-ranked officials weigh in on the matter. The UK’s Chancellor and Under-Treasurer of Her Majesty’s Exchequer, Philip Hammond, has said that the UK won’t try to stop Libra, but rather to regulate it in light of its transformative potential.
Back in June, social media giant Facebook revealed its much-awaited cryptocurrency project, Libra. However, the newly-announced project didn’t receive the regulatory blessing it had been hoping for.
Almost immediately after the news, the French Finance Minister, Bruno Le Maire, took fire, saying that Libra shouldn’t be seen as a replacement for regular currencies and that “it can’t and it must not happen.”
Moreover, according to a German member of the European Parliament, Markus Ferber, regulators should stay on high alert in this regard:
Multinational corporations such as Facebook must not be allowed to operate in a regulatory nirvana when introducing virtual currencies.
This doesn’t seem to be the opinion of the head of the UK’s Treasury, Philip Hammond. The high-ranking official expressed a rather pleasant opinion on Libra, acknowledging that it could be “transformative in operating payment systems,” should it be properly regulated. He also stated that the UK wouldn’t attempt to stop it, but rather to put it under an effective legislative framework.
Speaking to CNBC’s Squawk Box, Hammond said:
We’ve made the decision in the UK that we’re going to engage with this. We’re not going to turn our back on it. We’re not going to try and stop it. We’re going to … try and work with others to ensure that it’s effectively regulated. And if it works and it’s properly regulated, it could be transformative in operating payment systems, for example. It could be a very positive thing.
On another note, an important conversation will be held on Tuesday, July 16. That’s when the US Committee on Banking, Housing, and Urban Affairs will meet in an open session with David Marcus, Facebook’s Head of Calibra.
The hearing is titled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations.”
This is obviously an important event because Marcus will be tasked with clearing up a lot of misconceptions and defending the plans of the company. It’s probably safe to assume that there will be a lot of tension among regulators, especially given that Jerome Powell, the Chairman of the US Federal Reserve, recently said that “Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability.”