Bank of England governor calls for giving Facebook Libra a chance

July 12, 2019 AtoZ Markets – Bank of England’s governor Mark Carney has revealed his opinions on Facebook’s Libra coin at the financial stability press conference. He explained that the users need to acknowledge the issues that Libra coin is attempting to solve through the project.

Carney calls for giving Libra coin a try

Before the launch, Facebook plans to build a digital currency which has raised concerns among global regulators that it could quickly become operational and attain cross-border reach.

Bank of England governor, Mark Carney stated that “It’s way too expensive to do domestic payments. It’s way too slow, and that hurts consumers and businesses. It stifles innovation, and it’s far too expensive to send money cross-border, and there are huge financial inclusion issues related to that and costs related to that. So, while we are trying to address all these issues, we have to absolutely acknowledge the problem that they’re trying to solve. And if it’s not this, we’d better have some answers for what else it is.”

Before Carney, Jerome Powell of the U.S. Federal Reserve Chair had spoken of the need for Facebook to partner with Libra to be gain mass adaptation. Also, the Monetary Authority of Singapore said that Libra would fall under the Payment Services Act.

Mark Carney is optimistic for the future of Libra coin due to the massive scale of the project. As per him, from financial security perspective, the coin might be a perfect fit. 

He also said that: “It’s either successful or it isn’t. If it’s successful, it becomes systemic, because it would involve a very large number of users. And if you’re a systemic payment system, it’s 5-sigma. You have to be on all the time. You can’t have teething issues. You can’t have people losing money out of their wallets. The standards are in a different zip code to use the American term.”

Other major economies viewpoint on Libra coin

The Bank of Thailand “will study Facebook’s whitepaper”. Around 50 million users for Facebook are based in Thailand. The Bank of Japan has called Libra a “difficult-to-regulate coin” which also might posses a risk to financial systems while exploiting their existing structure. 

India has also been skeptical towards Facebook as an anti-crypto bill is kept under wraps for now. Calibra won’t be active on the Indian subcontinent. South Korea is a hub crypto enthusiasts like Singapore and Switzerland have also referred to this matter.

On the other hand, US Fed Reserve Chairman Jerome Powell also raised serious concerns and acknowledged that the coin should be subject to the highest level of prudential regulation. he mentioned that the Libra coin would be a type of stablecoin which is backed by a reserve of real-world assets such as bank deposits and government securities.

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