Their has been immediate regulatory scrutiny on Facebook’s plans to launch Libra Coin a new global digital currency as the announcement drew an immediate response from regulators from the Group of Seven nations.
The G7 working group will examine the risks of such currencies to the financial system and consider how to ensure proper controls against money-laundering, according to a letter from Bruno Le Maire, the French finance minister, and François Villeroy de Galhau, the governor of the Banque de France.
Central banks and the International Monetary Fund will also participate, according to the letter, which was seen by the Financial Times. The news came after Facebook revealed the details of a new currency, called Libra Coin and supported by more than two dozen companies and groups, from Visa and Mastercard to Vodafone and Uber.
Facebook says the currency would be backed by hard assets, a basket of currencies and securities to ensure trust and a stable value. Users would be able to make instant and nearly free international money transfers from their mobile phones.
In response, Mark Carney, the governor of the Bank of England, said international scrutiny would be brought to bear on Facebook’s plans and that the BoE greeted the ambitions “with an open mind” but not “an open door”.
Mr Carney said at a meeting of central bankers in Portugal that if Facebook was successful in attracting users “it would instantly become systemic and will have to be subject to the highest standards of regulation”.
The BoE, the UK Treasury and the Financial Conduct Authority have already held detailed tripartite discussions about Facebook’s ambitions and consequences on the UK regulatory and policy landscape, according to people familiar with the situation.
None of the authorities would comment.
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