- Bundesbank Says Central Banks Should Monitor Facebook’s Libra
Since Facebook released its whitepaper for Libra cryptocurrency project, central banks, IMF and other global financial experts have demanded more scrutiny and transparency in what they perceived as global game-changer considering Facebook reach.
While International Monetary Fund had said activities of global tech companies should be monitored to curb excessive disruptions to conventional system that might hurt not just job creation but exposed users data to abuse, central banks are saying given Facebook trust issue and recent lawsuits it should not be trusted with such project despite admitting its a unique idea necessary to further bring the world together.
Another top bank in Europe, Bundesbank, on Monday, said Facebook digital currency Libra could have a sustainable and significant effect on the global financial system and central banks.
In the monthly report released on Monday, the bank stated: “So far, important technical, organizational and regulatory questions about the proceedings of the Libra consortium are still open. Considerations of the potential effects are therefore speculative. At the same time, it seems appropriate that supervisory bodies and central banks closely watch and asses the plans. Innovations that increase wealth and reduce transaction costs should be supported. But important goals like monetary and financial stability and payment security must not be compromised.”
This was after French Finance Minister, Bruno Le Maire, said private companies like Facebook shouldn’t “have the possibility to create a sovereign currency.”
While Bundesbank called for caution, the bank seems more supportive than others. However, Facebook continues to face regulatory barriers as it works on perfecting and launching Libra in the first part of 2020.