Facebook Says Libra Cryptocurrency to be Regulated by Swiss Financial Authorities--Update
July 15 2019 - 1:31PM
Dow Jones News
By Dave Michaels
WASHINGTON -- Facebook Inc. said its Libra cryptocurrency would
be regulated by Switzerland's financial watchdog, adding the
digital money would never compete with national currencies or
undermine the role of central banks.
The details about Facebook's Libra plans were included in
written testimony that company executive David Marcus plans to
deliver Tuesday to the Senate Banking Committee. Mr. Marcus has the
challenge of tamping down concerns that Facebook -- already
embroiled in policy fights over digital advertising and customer
data -- is primed to disrupt the financial sector, one of the
world's most highly regulated areas of business.
President Trump, Federal Reserve Chairman Jerome Powell and
others have already expressed broad concern about Facebook's foray
into a space dogged by concerns about money laundering and
manipulative trading. Some Democratic members of Congress have
called on Facebook to suspend work on Libra until Washington is
satisfied with the oversight regime.
"We know we need to take the time to get this right," Mr. Marcus
said in written testimony. "Facebook will not offer the Libra
digital currency until we have fully addressed regulatory concerns
and received appropriate approvals."
Libra's primary regulator would be the Swiss Financial Markets
Supervisory Authority, Mr. Marcus said, because the group in charge
of the project will be based in Geneva. The group includes more
than a dozen other companies, including Mastercard Inc. and eBay
Inc., indicating that Facebook may not be in full control Libra
once it is off the ground.
The primary purpose of the cryptocurrency is to enable people to
use and transfer money around the globe, at a cheaper cost than the
current options, Facebook said. The Silicon Valley giant added
Libra would be most useful in countries where banking options are
scant and the home currency is volatile.
Facebook has said Libra would be a "stablecoin" pegged to a
basket of developed-world currencies. The coins will be backed by a
reserve of financial assets that include bank deposits and
government bonds.
The Libra group "will work with the Federal Reserve and other
central banks to make sure Libra does not compete with sovereign
currencies or interfere with monetary policy," Mr. Marcus said in
his testimony.
Libra isn't an investment, Mr. Marcus also said: "People will
not buy it to hold like they would a stock or a bond."
If it isn't an investment, the Securities and Exchange
Commission would less likely regulate the Libra. The SEC enforces
investor-protection laws that require frequent and elaborate public
disclosures. The SEC is reviewing whether Libra should fall under
its jurisdiction, according to people familiar with the matter.
(END) Dow Jones Newswires
July 15, 2019 13:16 ET (17:16 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Aug 2024 to Sep 2024
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Sep 2023 to Sep 2024