Authorities in the UK and worldwide have ramped up calls for increased scrutiny on new digital currencies and financial disruption, in the wake of Facebook attempting to enter the space.
G20 regulatory group the Financial Stability Board (FSB) said today the trend set by Facebook’s libra coin will cause regulators to take a deeper look at fintech and the risks it could pose.
“A wider use of new types of cryptoassets for retail payment purposes would warrant close scrutiny by authorities to ensure that they are subject to high standards of regulation,” said FSB chair Randel Quarles.
“The FSB and standard setting bodies will monitor risks very closely and in a coordinated fashion, and consider additional multilateral responses as needed.”
His comments echoed those of Financial Conduct Authority (FCA) chief Andrew Bailey, who told the Treasury Committee yesterday that Facebook “will not walk through authorisation” without deep engagement with regulators.
He added Facebook and the FCA had already entered discussions on the matter.
“We have already engaged with Facebook and there will be many more engagements. We are waiting to see how the responsibility will divide between Facebook and the other organisation,” he said.
Facebook’s libra coin will be backed by a basket of currencies and treasuries from “stable” economies, and managed by an independent association in Geneva.
The initiative has faced a great deal of scrutiny, particularly in the US where politicians have lobbied publicly to decrease the influence of big tech.
Maxine Waters, chair of the US House Financial Services Committee, said yesterday Facebook will be called to give testimony in front of regulators and politicians about the project.
Waters has called multiple times for Facebook to halt development of its libra programme until the government can make a decision on its potential risk.