Facebook's Libra cryptocurrency needs deep thought and detail - UK regulator

Global Blue Holding

02/07/2019 15:40

* Libra poses questions for society and govt -regulator
    * Deep thought and detail needed
    * FCA assesses new projects on case-by-case basis

    By Tom Wilson
    LONDON, July 2 (Reuters) - Facebook's fledging
cryptocurrency will raise questions for both society and
government that need close examination, a senior official at
Britain's financial watchdog said on Tuesday, in  another sign
that the planned project will face deep scrutiny. 
    Facebook Inc  FB.O  unveiled its Libra digital coin last
month, raising immediate concerns over its potential impact on
privacy from lawmakers and regulators around the world. 
    Libra's "size and scale will pose questions for society and
government more generally about what is acceptable and desirable
in this space," Christopher Woolard, executive director of
strategy and competition at the Financial Conduct Authority.    
    "Historically, this may have been a sector that has lived by
the mantra of 'move fast and break things,' but the issues
raised here require deep thought and detail," Woolard told a
conference at the University of Cambridge, according to remarks
posted on the FCA's website. 
    Facebook will likely face unprecedented regulatory scrutiny
over Libra, planned for launch by the end of June 2020. The coin
would mark the social media giant's entry into one of the
least-regulated areas of finance.  urn:newsml:reuters.com:*:nL2N23Y0WU
    The response of domestic and international financial
regulators and monetary authorities to the Libra project will
have a crucial impact on its prospects.
    Though some, including the FCA, have said they have met
Facebook to discuss the project, there are still many questions
over exactly how it will operate.
    Libra faced mounting attention last week as European central
bankers and regulators demanded greater detail on the
project. urn:newsml:reuters.com:*:nL8N23W4PT
    Crucial decisions on such projects lie with lawmakers, the
Bank for International Settlements (BIS), an umbrella group for
central banks, has warned. Politicians need to quickly
coordinate regulatory responses to new risks as Facebook and
other tech firms move into finance, the BIS said last month.
 urn:newsml:reuters.com:*:nL8N23S3E6 
    In general, the FCA looks at any so-called cryptoasset - a
catch-all term that includes bitcoin and other digital tokens -
on a case-by-case basis, Woolard said. It asks questions on
whether it would benefit competitive markets and consumers, or
cause harm by raising complexity and others risks, he added. 
    "It is crucial that we also think about the reality – the
technical details, the technology; and the legal position."   

 (Reporting by Tom Wilson, Editing by William Maclean)
 ((mailto:T.Wilson@thomsonreuters.com; 44-20-7542-4531; Reuters
Messaging: rm://t.wilson.thomsonreuters.com@reuters.net))