It had been the first elected us to react after the presentation of the project of private currency Libra in June. In an open letter sent to the directorate of Facebook, Maxine Waters, the chair of the committee on financial services of the house of Representatives and four other deputies asked the company and its partners to accept “an immediate moratorium” on the development of their project. The time that the Congress and the various regulators can examine and evaluate all the risks.
” READ ALSO – How will Libra, the new currency of Facebook
“It raises serious concerns about privacy, commerce, national security and monetary policy, not only for more than 2 billion users of Facebook, but also for investors, consumers and, more broadly, for the entire global economy,” they write. In the case of Cambridge Analytica to the role in interference in the presidential election of 2016, the elected officials did not hesitate to trace the history of its failures. The group is always the risk of a fine between 3 and billions of dollars of the Federal Trade Commission (FTC).
The letter also refers to the risks related to money laundering and fraudulent activities often associated with cryptomonnaies. But the priority is to protect themselves from a systemic risk in the event of the success of massive digital currency, which applies to both the 2.2 billion users of Facebook and the 1.7 billion people today débancarisés. “If products and services like these are not regulated properly, and without adequate oversight, they could pose a systemic risk that would endanger the financial stability of american and global. (…) If we can’t prevent its implementation, the risks are of having a financial system based in Switzerland that will become too big to fail (“too big to fail”)”.
The father of the Libra David Marcus auditioned
David Marcus, the head of the division Libra of Facebook, must be heard by the Senate banking committee on 16 July and then the next day by the committee on financial services of the House of Representatives.
“We look forward to working with legislators as this process moves forward, in particular by responding to their questions at upcoming Congressional hearings” has just said a spokesman of Facebook, when asked about the letter.
elected officials in the u.s. do not have the power to force Facebook to put its project in pause, but this letter indicates that the group is expected at the turn, and not only by supporters of their dismantling, as a candidate in the democratic primary, Elizabeth Warren.
Necessary international coordination
The elected americans are not the only ones who have openly expressed their concerns about the potential risks associated with the development of this currency. The central banks of the G7 countries have created a “task force” to study the project, chaired by the frenchman benoît Coeuré, member of the executive board of the european central bank. The country should approach the subject at a meeting of Finance ministers in Chantilly on July 17. “We strive for a common response to all public authorities, including the u.s., which would integrate all aspects of the project,” said Villeroy de Galhau, the governor of the bank of France, in an interview with The Obs.
The Bank for international settlements -the central bank of central banks – has called for his side to be a “national and international coordination between authorities in order to ensure fair conditions of competition between large banks and large technology companies”. “The incursion of the major technologies in the financial services presents tradeoffs and new complex between financial stability, competition and data protection,” said the institution in its report “Big tech in finance: opportunities and risks”, which refers to new regulatory challenges.
“The size and scale will begin to ask questions”
The financial stability board (FSB), an instance of coordination of the G20 countries, but also stressed the need for coordinated efforts and invited the country to engage in a dialogue with major technology groups, who had so far little interaction with the financial authorities. “The cryptoactifs does not pose currently threat to financial stability at the global level (…) but gaps can occur in the absence of international standards, where these cryptoactifs to fall outside of the scope of action of regulatory authorities” warned its president, Randal Quarles in a letter.
“the size and The scale will ask questions to the company and the government more generally on what is acceptable and desirable in this space,” insisted his side the Financial Conduct Authority, britain’s financial regulator, which is working on the subject with the central bank of England and the chancellor of the exchequer. “It is also essential that we reflect the reality: the technical details, the technology and the legal situation”. The FCA has already been in contact with Facebook in the months preceding the presentation of the project, but considers that there are still many questions around the precise manner in which it will operate.
each time Facebook says he will cooperate fully with the various authorities. He knows that he plays big. The future of the Libra and her foray into the financial world will largely depend on the frameworks imposed by legislators and regulators internationally.
