Facebook Crypto To Face Scrutiny By European Central Bankers

While Facebook is aiming to have its Libra crypto power transactions and provide access to financial services to those without bank accounts, European central bankers are claiming oversight over the digital currency. They want to make sure that the digital currency isn’t used for money laundering and that it doesn’t jeopardize the financial system, Reuters reported.

Bank of England Governor Mark Carney told the BBC, “It has to be safe, or it’s not going to happen.” Even so, central markets have, for the most part, refrained from the regulation of crypto as they failed to come to an agreement last year on how to accomplish that task — and reaching the conclusion that they were too small to create a financial system risk.

At the same time, other regulators around the world have been watching the growth of digital currency. France-based anti-money laundering watchdog The Financial Action Task Force is thought to be making public rules to tackle the digital coins that are used for illegal reasons. The announcement of Libra, however, has brought the issue to their attention as the focus moves from bitcoins to stabecoins that are backed by assets in the real world.

Separately, the news comes as it was reported that Libra will be the focus of a Senate panel hearing in July. The U.S. Senate Banking Committee is slated to conduct a hearing on the project on July 16. No formal witnesses have been named, per a recent report. It is expected, however, that David Marcus, who helms the company’s activities in the blockchain space, will testify before the panel.

At the same time, news also surfaced that the Democratic chair of the House Financial Services Committee, Rep. Maxine Waters, said earlier this week that she will call on Facebook to testify before her committee. Waters also had asked the project be put on hold as lawmakers studied the Libra project.