Facebook and the Libra Association plan to launch their digital currency on time, despite a number of unresolved issues with regulatory authorities, as well as a lack of a clear strategy for entering the market. Against this background, the two main regulators of the United States made comments on the upcoming launch of the social network’s stablecoin.
Secretary of the Treasury doesn’t oppose to Libra launching if requirements are complied
It seems that the US Treasury disagrees about the possibility of launching a global stablecoin. The head of the department, Steven Mnuchin, said he did not object to the launch of the Libra project, provided that the necessary requirements would be met. He clarified that compliance with the bank secrecy law is implied. The Secretary also urges to follow the rules of combating money laundering and pay attention to the danger of financing terrorism with the help of cryptocurrencies.
Talking with lawmakers about digital currencies, Mr Mnuchin also raised the topic of China’s digital yuan. As he says, the United States is not going to deal with anything similar in the nearest five years.
Secretary of the Treasury also met with representatives of Facebook and has largely influenced the stagnation of Zuckerberg’s crypto project.
Federal Reserve doubts about working capacity of digital currency Libra
The Federal Reserve believes that without evidence, the operability of the Libra project is still in doubt. The Federal Reserve Board member, Mrs Lael Brainard, notes that the Libra Association will have to cope with a number of legal and regulatory challenges.
According to Brainard, the idea of a stable digital asset replacing other cryptocurrencies is not concluded in Libra. She states that the stablecoin of a social network is different from other crypto projects only due to the huge number of users. Users database consists of almost a third of the world’s population. Coins issued by a private corporation are tied to a basket of currencies, but this binding is not transparent. It seems to present certain risks for potential users of Libra.
Mrs Brainard agrees with other critics of the crypto project, which, with all the disadvantages of the announced stablecoin, note its technological advantages: reduction of expenses when making payments, increase in the speed of money transfers, etc. At the same time, the representative of the Federal Reserve Board is confident that the existing monetary system is more perfect.