U.S. Federal Reserve Puts Facebook’s Project Libra in the Hot Seat
The United States Federal Reserve Chairman, Jerome Powell, has joined the growing list of authorities calling for the head of Mark Zuckerberg and Project Libra. Powell says Libra’s global cryptocurrency poses serious concerns regarding money laundering, privacy, and a host of others reports CNBC on July 10, 2019.
Powell Says Libra must Answer all the Questions
Per sources close to the matter, Federal Reserve Chairman Jerome Powell has pointed out a list of pain points that must be taken care of before Libra can go live as scheduled in 2020.
Specifically, Powell has made it clear before a Congressional committee that Libra raises many concerns that must be thoroughly addressed, including privacy, consumer protection, financial stability, and money laundering.
The Federal Reserve chief claimed that Facebook’s Project Libra could only see the light of day if the team behind it answers all the questions of lawmakers and regulators.
Bradley James Sherman, the Bitcoin-hating Congressman representing California’s 30th congressional district, used Wednesday’s hearing as an opportunity to bash Libra and Zuckerberg. He stated that the proposed global digital asset could potentially strip the United States government of its powers and transfer it to “tax-evaders, terrorists, drug dealers and nations facing international sanctions.”
Sherman also accused Zuckerberg of trying to undermine the U.S. system even after making billions of dollars from the nation and relying on the government for protection.
As reported by BTCManager earlier in June 2019, Rep. Maxine Water called on Facebook to halt Libra development until Congress and other relevant authorities conduct a proper hearing.
Powell also appears to support Rep. Water’s stance, as he hinted through his response to Rep. Ed Perlmutter’s question that Facebook’s global crypto ambition does not easily or neatly fit into the U.S. regulatory scheme and as such “it needs a careful look.”
The Head of Libra’s Calibra wallet, David Marcus, responded to questions from the Senate Banking Committee via a letter, saying Facebook is ready to work with governments, central banks, as well as global financial regulators to make Project Libra a success.
In conclusion, Powell noted that the central bank supports “responsible innovation” in the financial ecosystem, providing the associated risks are identified and adequately managed.
He also revealed that the apex bank has met with Facebook’s representatives and has set up a committee to tackle the “unanswered questions.”
Marcus will appear before the Senate Banking Committee on July 16, 2019, and the House Financial Services Committee will conduct its hearing focused on Libra on July 17, 2019.