Facebook’s Libra cryptocurrency is just about to face more review, and it may have to tackle some challenging queries. Today, in Basel, Switzerland, Libra executives will met with authorities from 26 central banks (including the Bank of England and the US Federal Reserve).
The meeting is anticipated to be chaired by Benoît Coeuré of the European Central Bank, who will query Facebook on the “scope and design.” of the digital currency.
In response, Libra reaffirmed its previous position that it “welcome[s] this engagement” with political elites and policymakers, and that it “deliberately” sets out a lengthy launch date to discuss problems and alter its feedback-based plans.
The discussion may not go the way Facebook and Libra team anticipates.
Specifically, Coeuré advised that Libra had to meet a “very high” standard, and in specific EU finance ministers were concerned that cryptocurrencies such as Libra might disrupt financial sector and undermine public banks’ power.
Both France and Germany asserted that Libra should be flagged in the EU because it would compromise governments’ “monetary sovereignty” Facebook has presented Libra as a means of democratizing cash, supplying several first-timers with banking and establishing a model that is autonomous of any nation. It’s the last part, though, that worries authorities and skeptics.
While Libra is a “stablecoin” to be attached to a traditional currency’s value, it might give a great deal of power and influence to Facebook and the Libra Association if the endeavor becomes a reality. It might not have much option but to give guarantees if it wishes the currency to be widespread, and even that is not assured.
