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Broad Satisfaction for Regulatory Concerns Need Achieving, Fed Chair Claimed Regarding Libra

By Emily Rys | July 11, 2019
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Broad Satisfaction for Regulatory Concerns Need Achieving, Fed Chair Claimed Regarding Libra

Federal Reserve Chair Jerome Powell said that Facebook has to achieve a high satisfaction rate, regarding its approach in dealing with regulatory concerns regarding its Libra project.

During a hearing session with the House Financial Services Committee on July 10, Steve Stivers – one of the reps of the House – posed a question to Powell, asking “if Facebook can’t sufficiently answer your questions about anti-money laundering (AML), Know Your Customer, what would your message be to the banks that provide banking to Facebook, and what would your advice to Facebook be?” 

“ … I just think it cannot go forward without there being broad satisfaction with the way the company has addressed money laundering, all of those things. The number of concerns that I list at the beginning, data protection, consumer privacy, all of those things will need to be addressed very thoroughly and carefully.” Powell replied.

Powell also argued that Libra is not a standard project that fits in a normal regulatory scheme, and emphasized that the project has “potentially systemic scale.”

Regarding Chairwoman Maxine Waters’ question, on should Libra stablecoin can cause any problem to the monetary policy, Powell replied: 

“Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability. These are concerns that should be thoroughly and publicly addressed before proceeding.”

Powell has recently provided testimony for Libra, in a press conference on June 19, and have answered a question concerning how much the Fed would be involved in establishing regulations for Libra.

“… we don’t have plenary authority over cryptocurrencies as such. They play into our world through consumer protection and money laundering and things like that. But, I would say that … through international forums … we have significant input into the payment system and, as you know, play an important role in the payment system here in the United States.”

Of late, the U.S House of Representatives Committee on Financial Services has requested a moratorium on Libra’s development. In a responding to the House, David Marcus, the co-creator of Libra, claimed to cooperate and assuage the public’s concerns.

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