- US Federal Reserve Chairman Jerome Powell warned regulators when they are considering the plans for the Libra
- The Fed has set up a working group to monitor the Libra
- This comes after Libra has been subjected to continuous Congressional control
US Federal Reserve Chairman Jerome Powell said on Wednesday that Libra's Facebook project could not "go ahead" without first addressing concerns about money laundering. confidentiality and protection of customers, among others.
In a testimony before the Financial Services Committee of the US House of Representatives, Powell warned that regulators should be "patient and cautious" when considering the Balance project because no existing rule can contain cryptocurrencies. He also mentioned that the Fed had set up a working group to oversee the project.
"It's something that does not fit right into our regulatory system, but it has a potentially systemic scale," he said. "It requires a careful look, so I strongly believe that we all have to take our time with that."
Admittedly, this is not the first time that the Facebook project of Libra is asked for a break. On July 2, two weeks after the announcement of her digital currency plan by Facebook, Maxine Waters, chair of House's Financial Services Committee, sent a letter to Facebook CEO Mark Zuckerberg called for the stop of the project.
In response, David Marcus, head of Facebook's digital wallet provider, Calibra, sent an open letter to Congress, saying that Facebook would not have access to personal data through Libra. The company is also scheduled to hold a hearing before the House Financial Services Committee next week.
Meanwhile, Facebook itself seems to be fully aware of the regulatory hurdles it must overcome to advance its cryptocurrency ambition. In an email to Reuters, Facebook spokesperson Elka Looks said that while Libra is due to be launched in 2020, its announcement was made "well in advance so that we can engage in a constructive speech about it and get feedback. "
Immediately following the announcement of its ambitious cryptocurrency plan last month, the social media giant has been caught in a series of criticisms and skepticism from regulators around the world. Several European central bankers have stated that they were waiting for more details about the Libra on Facebook, while France is setting up a working group examine the cryptocurrency project. The Chinese central bank also recently said that Libya should be under regulatory supervision.