Mark Carney – the governor of the Bank of England – claimed that the general audience need to be more aware of the problems Facebook is trying to resolve, with its Libra project, regardless of the disadvantages.
Carney made the comments during the Financial Stability Report press conference, as reported by the Bank of England via their Youtube channel on July 11th.
“It’s way too expensive to do domestic payments. It’s way too slow, and that hurts consumers and businesses. It stifles innovation, and it’s far too expensive to send money cross-border, and there are huge financial inclusion issues related to that and costs related to that. So, while we are trying to address all these issues, we have to absolutely acknowledge the problem that they’re trying to solve. And if it’s not this, we’d better have some answers for what else it is.” Carney claimed.
However, Carney further remarked that, since Libra is a project which will perform on a huge scale, it is vital that Libra contains no flaws at the outset – at least in terms of financial security – to be considered for public release.
“It’s either successful or it isn’t. If it’s successful, it becomes systemic, because it would involve a very large number of users. And if you’re a systemic payment system, it’s 5-sigma. 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 … The standards are in a different zip code — to use the American term.”
Carney continued by naming a few problematic issues Libra need to handle, including basis risk, rebalancing risk, managing underlying assets, facilitating anti-money laundering and counter-terrorism, before its official introduction.