Facebook Inc (NASDAQ:FB) project. on the creation of a new cryptocurrency should be carefully considered by regulators, said the head of the Bank of England, Mark Carney.
Earlier this week, Facebook announced that it plans to release a cryptocurrency, called Libra, next year. It will fall into the “stablecoin” category (Stablecoin is the general name for cryptocurrencies that are backed by national currencies and assets).
According to M. Carney, Libra has every chance of becoming an important part of the global financial system, given the huge reach of the social network Facebook, and therefore, global regulators and central banks need to study this project.
“Libra will be a systemically important asset if the ambitions of this project are realized”, Carney said in a statement released by the Bank of England.
Facebook said its cryptocurrency is intended for everyday users. Thus, Libra is one of the most ambitious projects designed to introduce cryptocurrency into mass use, experts say.
Facebook’s partners in this project include payment systems Visa (NYSE:V), Mastercard and PayPal, as well as technology companies Uber and Spotify.
M. Carney noted that Facebook and its partners will have to comply with regulatory requirements in various areas – from anti-money laundering to data protection. Global central banks will need to assess the consequences of the creation of Libra for financial and monetary stability, he said.
This issue, according to Carney, needs to be studied before the official launch of Libra.
“Unlike social media, where regulatory standards are created long after they have been used by billions of users, the terms of innovation such as Libra must be agreed upon in advance”, Carney said.
According to him, the Bank of England will treat Facebookâs cryptocurrency “without bias”.
Facebook’s announcement of plans to launch its own cryptocurrency was met with little enthusiasm both in the United States and in a number of other countries, including France and Australia.
A group of American Democratic congressmen criticized the project and proposed strengthening oversight in this area. The chairman of the US House Financial Services Committee, Maxine Waters, announced her intention to hold hearings and demanded that Facebook “press pause” so that Congress and regulators could carry out the necessary checks.