European Central Bank Executive Board member Benoit Coeure has issued a warning to Facebook for its forthcoming Libra cryptocurrency.
Policymakers have been scrambling to create a coherent regulatory framework regarding Facebook’s Libra cryptocurrency. Multiple central bank heads have already weighed in and now we have a public statement from the European Central Bank (ECB) itself.
Turning Up the Heat
“It’s out of the question to allow them to develop in a regulatory void for their financial service activities because it’s just too dangerous,” Coeure told reporters. He urged his colleagues to “move more quickly,” stressing that Facebook’s Libra is a “wake-up call” for regulators. Ultimately, he says, that Libra may “make us improve the way we do things.”
Altogether, Coeure seems to echo what other regulators have said about Libra forcing regulators to be better. The Chairman of CFTC spoke similarly of blockchain technology in general, saying that it will force regulators to prevent the 2007-08 crisis from happening again.
The Bank of England’s Governor Mark Carney also stated that “We’re keeping an open mind, but not an open door” on Libra. However, other central bankers and regulators have hesitated to be optimistic.
Regulation of Facebook’s Libra is Key
Coeure is an established figure within the European Central Bank. He has even been called upon to lead the ‘G7 cryptocurrency task force’ recently proposed by France. The task force would be responsible for creating a consistent regulatory framework for Libra and other cryptocurrencies across all G7 nations.
We’ll have to see if the ECB will take concrete steps to regulate Facebook’s cryptocurrency. So far, it has not issued any statements arguing that the asset is a threat to the Euro or any sovereign currency. Coeure, at the very least, seems open to making Libra compliant.
Do you believe that Libra will be able to launch in 2020 despite these regulatory hurdles? Let us know your thoughts in the comments below.