According to CNBC’s report on July 15, British Finance Minister Philip Hammond said that regulators, not legislators, should decide how to regulate Facebook’s cryptocurrency Libra.
Hammond said in an interview with CNBC's "Squawk Box" that it is not up to the legislators to decide whether social media giant Facebook needs to apply for a banking license because it is "a problem that regulators have to determine, not politicians." Hammond said that once properly regulated, Libra may be "a very positive thing" and added:
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“We will not reject it or try to stop it. We will interact with it and try to work with others to ensure it is effectively regulated.”
Hammond further stressed that without proper review, Libra may pose a huge risk to the financial system because it could become a tool for money laundering and terrorist financing. Hammond also pointed out that he believes that there is a difference between Libra and Bitcoin because they have very different ownership structures.
In early July, Bank of England Governor Mark Carney said that no matter how many potential shortcomings the project has, people need to acknowledge that Facebook is trying to solve Libra-related issues.
Carney also said that due to the size of the project, Libra must be perfect from the start – at least in terms of financial security – only then can the project be launched.
Hammonds made the above comments before the July 16 hearing with the US Senate Banking Committee on the cryptocurrency Libra project. After the project white paper was released, US regulators expressed concern about the possible impact of the project on financial stability.