While it is true that global regulators are not pleased with Facebook’s decision to launch what would potentially become a global currency, shreds of evidence show that at least a handful of U.S authorities were contacted before yesterday’s release of the Libra cryptocurrency.
Speaking during a press conference today, Jerome Powell, Chairman of the United States Federal Reserve confirmed that the company had spoken with the agency prior to announcing the whitepaper for Libra.
He made the revelation while answering questions on whether the cryptocurrency planned by Facebook would affect the U.S Central Bank’s ability to conduct monetary policy in the future effectively.
Powell told the audience,
“You know Facebook, I believe, has made quite broad rounds around the world with regulators, supervisors, and lots of people to discuss their plans, and that certainly includes us.”
The Fed Chairman then downplayed any effect that either Facebook’s Libra or even the whole cryptocurrency market could have on the effective conduct of monetary policy.
He specifically noted that “we’re a long way from that [cryptocurrencies affecting monetary policy],” before going on to add that “digital currencies are in their infancy.”
Despite those claims, however, Powell expressed some concern that given the size of Facebook’s influence on the global community, there would be ‘potential benefits and risks’ to Libra.
To this end, he recommended adopting an approach approved earlier in the day by Central Bank of England Governor, Mark Carney.
“We will wind up having quite high expectations from a safety and soundness and regulatory standpoint if they do decide to go forward with something,” Jerome Powell rounded up.
Undoubtedly, Powell’s comments regarding Facebook contacting the U.S Federal Reserve for the Libra cryptocurrency means the company met with at least two leading U.S regulatory bodies regarding the project. We reported earlier that Facebook had met with the U.S Commodity and Futures Trading Commission (CFTC) although its affair with the U.S Senate Banking Committee has been a little more complicated.
Following yesterday’s unveiling, the Committee has reportedly set a July date for a hearing regarding Facebook’s Libra.