Yesterday, Facebook announced that it won’t go forward with the launch of the Libra cryptocurrency until the regulatory matters are seen to, as the United States Treasury Secretary, Steve Mnuchin, said he had concerns that the currency could be exploited for illegal activities.
Facebook blockchain supervisor, David Marcus, arranged to tell Congress that the cryptocurrency is not made to go up against regular currencies or disturb monetary policy.
“The Libra Association, which will manage the (Libra) Reserve, has no intention of competing with any sovereign currencies or entering the monetary policy arena,” Marcus was projected to comment today, according to the arranged testimony released by the Senate Banking Committee. “Monetary policy is properly the province of central banks.” He further stated, “Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals”.
Mnuchin told reporters that he was uncomfortable with Libra in regards to protection against money laundering and illegal avenues. “They’re going to have to convince us of very high standards before they have access to the U.S financial system,” said Mnuchin. “These cryptocurrencies have been dominated by illicit activity and speculation”.
Mnuchin is not the first senior U.S regulator to express concern with the cryptocurrency. Recently, Chairman of the Federal Reserve, Jay Powell voiced similar apprehension over the potential abuse of the digital currency.
Marcus stated in his prepared testimony that the Libra Association intended to go ahead with the registration as a money services business with FinCEN – the Treasury Department’s Financial Crimes Enforcement Network. He said that the Libra Association is completely prepared to abide by the anti-money laundering and Bank Secrecy Act regulations.
Skepticism over Libra
Since the introduction to Libra a month ago, Facebook has endured criticism from policymakers globally, who are anxious over the potential data security, money laundering, and consumer protection risks.
While assuring lawmakers that Libra would stick to the appropriate rules, Marcus also tried to promote the benefits of the digital currency. “I am proud that Facebook has initiated this effort here in the United States,” Marcus said in his testimony. “I believe that if America does not lead innovation in the digital currency and payments area, others will. If we fail to act, we could soon see a digital currency controlled by others whose values are dramatically different.”