Facebook’s planned cryptocurrency will raise questions for both society and government that need close examination, a senior official at Britain’s financial watchdog said on Tuesday, Reuters reports.
Libra’s “size and scale will pose questions for society and government more generally about what is acceptable and desirable in this space,” Christopher Woolard, executive director of strategy and competition at the UK’s Financial Conduct Authority, was quoted as saying.
“Historically, this may have been a sector that has lived by the mantra of ‘move fast and break things,’ but the issues raised here require deep thought and detail,” Woolard is said to have told a conference at the University of Cambridge.
In general, the FCA looks at any so-called crypto asset on a case-by-case basis, Woolard said. It asks questions on whether it would benefit competitive markets and consumers, or cause harm by raising complexity and others risks, he added.
“It is crucial that we also think about the reality – the technical details, the technology; and the legal position.”
The comments came after Facebook last month unveiled plans to create a digital currency called Libra, raising immediate concerns over its potential impact on privacy.
The social network giant will likely face unprecedented regulatory scrutiny over Libra, planned for launch by the end of June 2020, Reuters noted.
The response of domestic and international financial regulators and monetary authorities to the Libra project will have a crucial impact on its prospects.
Though some, including the FCA, have said they have met Facebook to discuss the project, there are still many questions over exactly how it will operate, the report noted.
Crucial decisions on such projects lie with lawmakers, the Bank for International Settlements (BIS), an umbrella group for central banks, has warned.
Politicians need to quickly coordinate regulatory responses to new risks as Facebook and other tech firms move into finance, the BIS said last month.
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