Facebook’s plan to launch a digital currency Libra is starting to get stumbling blocks from the authorities. Chairman of the US Federal Reserve, Jerome Powell, said the Facebook Libra project cannot be continued unless the problem is resolved.
“Libra raises serious concerns about privacy, money laundering, consumer protection, and financial stability,” said Powell, who heads the most powerful financial regulator in Uncle Sam’s country.
“I don’t think the project can continue,” he added, quoted by Reuters.
He said the Facebook Libra regulatory review must be done carefully. Moreover, the existing rules are considered to be incompatible with digital currencies such as Libra.
‘This is something that does not fit into our regulatory scheme but has the potential to have a systemic scale. So it needs to be looked at carefully, so I’m very sure we all need to be patient about this,’ he explained.
Powell’s comments have an impact on Bitcoin, which previously continued to climb because Libra has the potential to create a mainstream cryptocurrency. Bitcoin prices fell 7% following Powell’s statement. While a Facebook spokesman himself claimed no problem with Powell’s request.
‘We feel in harmony with the chairman’s statement about the need for public discussion about this. That’s why we together with 27 members of the Libra Association made announcements in advance, so we can engage in constructive discussions and get feedback,’ said a Facebook spokesman.
Libra, which is planned to be released next year, also raises concerns for politicians, especially privacy issues. So this month, Facebook officials are scheduled to speak before the US Congress.