Latest in Gear

Image credit: Chesnot/Getty Images

Central banks to question Facebook over Libra cryptocurrency

They're concerned the virtual money would destabilize the financial world.
376 Shares
Share
Tweet
Share

Sponsored Links

Chesnot/Getty Images

Facebook is about to undergo further scrutiny of its Libra cryptocurrency, and it may have to answer some difficult questions. Officials speaking to the Financial Times said that Libra representatives are meeting with officials from 26 central banks (including the Bank of England and the US Federal Reserve) in Basel, Switzerland on September 16th. The European Central Bank's Benoît Coeuré is expected to chair the gathering, which will question Facebook over the digital money's "scope and design."

In response, Libra reiterated its earlier stance that it "welcome[s] this engagement" with politicians and regulators, and that it "deliberately" set out a long launch schedule to discuss issues and modify its plans based on feedback.

The conversation might not go the way Facebook and the Libra team hope. Coeuré in particular has warned that Libra has to clear a "very high" bar, and EU finance ministers in particular have worried that cryptocurrencies like Libra could destabilize finance and undercut the authority of government banks. France and Germany have both argued that Libra should be blocked in the EU as it would challenge the "monetary sovereignty" of governments.

Facebook has pitched Libra as a way to democratize money, providing banking to many first-timers and creating a format that's independent of any one country. However, it's that last part that has officials and critics worried. While Libra is a "stablecoin" that should be pegged to the value of conventional currency, it could give Facebook and the Libra Association a tremendous amount of clout if it takes off. It may not have much choice but to make concessions if it wants the currency to be widely available, and even that isn't guaranteed.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
376 Shares
Share
Tweet
Share

Popular on Engadget

Blizzard may reveal 'Diablo IV' at Blizzcon

Blizzard may reveal 'Diablo IV' at Blizzcon

View
Georgia court rules police need a warrant to get data from your car

Georgia court rules police need a warrant to get data from your car

View
Google adds seasonal Nest doorbell ringers in time for Halloween

Google adds seasonal Nest doorbell ringers in time for Halloween

View
NordVPN admits to 'isolated' server breach in Finland

NordVPN admits to 'isolated' server breach in Finland

View
Mitt Romney has a ridiculous Twitter alias: Pierre Delecto

Mitt Romney has a ridiculous Twitter alias: Pierre Delecto

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr