Registered users can save articles to their personal articles list. Login here or sign up here

Facebook’s libra must be ‘rock solid’ before launch warns BoE’s Carney

A number of issues including anti-money laundering and terrorist financing controls need addressing, says Carney.

Facebook’s proposed Libra digital coin must show it is “rock solid” before it can be allowed to launch, Bank of England Governor Mark Carney said on Thursday.

The social media giant plans to build a digital currency, raising concerns among global regulators that it could quickly become systemic given Facebook’s huge cross-border reach.

But Carney said many issues needed addressing first, such as anti-money laundering and terrorist financing controls, and managing and safekeeping the assets underpinning libra.

“If you are a systemic payment system, you have to be on all the time. You can’t have teething issues, you can’t have people losing money out of their wallets,” Carney said.

“This is not learning on the job stuff, it’s got to be rock solid right from the start or it’s not going to start.” Carney told a news conference.

US Federal Reserve Chairman Jerome Powell said on Wednesday that serious concerns need to be addressed before libra could launch, highlighting the global regulatory hurdles.

Libra would be a type of “stablecoin”, backed by a reserve of real-world assets, including bank deposits and short-term government securities.

“There are over 50 stablecoins on the market, and many are yet to prove that they are in fact, ‘stable’,” the BoE’s bi-annual Financial Stability Report published on Thursday said.

Carney said regulators recognised that libra was trying to solve a series of issues like domestic and cross-border payments being too slow and expensive. 

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   0

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

SHOP NEWSLETTERS TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2