Blockchain for Banking Legal and IP News

Bank of England, Senators talk Libra ahead of Zuckerberg Congress visit


Yesterday, the Bank of England’s Financial Policy Committee (FPC) revealed its findings on Libra. The FPC uses analysis and tests to ensure that the UK financial system is prepared for any future risks. It said that Facebook’s cryptocurrency project could be “systemically important”.

Bank of England on regulating Libra

“The FPC judges that such a system would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight,” the statement reads. While it gives a strict set of principles for regulating payment systems, the Bank of England does not go as far as France or Germany. These nations have said they support a ban of Libra, if it ever launches.

The release mirrors the comments of the bank’s Governor, Mark Carney, who said this summer: “The Bank of England approaches Libra with an open mind but not an open door […] the terms of engagement for innovations such as Libra must be adopted in advance of any launch.”

Interestingly, yesterday’s FPC statement repeated his words exactly: “The terms of engagement for innovations such as Libra must be adopted in advance of any launch.”

Zuckerberg to testify to Congress

In other Libra news, it was also revealed yesterday that Facebook CEO Mark Zuckerberg has agreed to testify before US Congress regarding the cryptocurrency. The announcement was from Congresswoman Maxine Waters, the chair of the House Financial Services Committee.

She, and other committee members, have been some of the most vocal critics of Libra, citing privacy and regulatory concerns. David Marcus, the head of Libra, has already answered questions in front of the Senate. Now, Mark Zuckerberg is scheduled to testify in front of Congress on the 23rd of October.

Senators ask Stripe to reconsider

However, US Senators are not all satisfied with Marcus’ visit. On Tuesday, Senators Brian Schatz and Sherrod Brown wrote a letter to the CEO of payment processing firm Stripe.

The letter outlined their “deep concerns” about Libra. The Senators urged Stripe to proceed with caution in working on the project. The letter pointed out that: “Even though Facebook is the driving force behind Libra […], the company has not provided a clear plan for how it will prevent Libra from facilitating criminal and terrorist financing, destabilizing the global financial system, interfering with monetary policy, or exposing consumers to risks[.]”

It was regulatory concerns like these that were likely behind PayPal, one of the project’s most high profile backers, officially backing out of Libra. Plus, there have been rumors that more firms are considering doing the same.