International Central Banks to Question Libra Over Security Concerns
Libra, the planned cryptocurrency led by Facebook, is to be questioned by officials from 26 central banks in Switzerland today.
Representatives from the heavily scrutinized project will face a grilling by officials from central banks, including the US Federal Reserve and the Bank of England, over the cryptocurrency’s “scope and design.” Since being announced in June, Libra has come in for significant perusal from government officials and regulators around the world due to concerns regarding the security of the Facebook-led coin.
Libra to Be Blocked in Europe?
Today’s meeting of the Committee on Payments and Market Infrastructure, a forum for central banks under the Bank for International Settlements, will be chaired by French ECB board member Benoit Coeure just days after the French Minister of the Economy and Finance pushed to block the development of Libra in Europe. The findings of the committee will be submitted to a meeting of the G7 nations in October.
“Stablecoins are largely untested, especially on the scale required to run a global payment system. They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high,” said Mr. Coeure following a meeting of EU finance ministers in Helsinki on Friday. However, he did offer some hope for the stablecoin, adding that Libra “has prompted fresh thinking on how to improve our payment systems.”
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Co-Creator of Libra Responds
David Marcus, co-creator of Libra and current head of facebook’s Calibra, responded to the objections raised by Bruno Le Maire, the French Economic Minister, in a Twitter thread today. He countered Le Maire’s claims that Libra posed a threat to countries’ economic sovereignty by pointing out the fact that it is backed 1:1 by a basket of strong currencies—which means that for the coin to exist, there must be an equivalent value in reserve.
Given the intense scrutiny Libra has come in for since its announcement, it will be interesting to see where the project goes in the next few months.
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