ECB raises regulatory warning on Facebook's encryption project Libra

According to Bloomberg News, ECB Executive Committee member Benoit Coeure said that financial regulators must act quickly against the new financial system launched by US technology giants such as Facebook.

Coeure said in an interview with Bloomberg in France on Sunday that "it is impossible to develop them in the regulatory gap of financial services because it is too dangerous. We must act faster than now."

Since Facebook launched its digital currency program Libra on June 18th, policy makers and regulators in various countries have shown great concern. The UK's three major financial regulators are collaborating on how to make the best response. The governor of the Bank of England said that it would “open the door to Libra” rather than open its doors. In the United States, there are more than 30 consumer interests and privacy-related groups that require the project to be stopped before it resolves the issues it raises. David Marcus, head of Facebook's Libra project and blockchain work, will also testify in Congress this month.

Coeure said that the development of digital currency has exposed the shortcomings of existing regulations and the failure of the banking system to apply new technologies. he thinks,

“All of these projects are a very useful alarm for regulators and public agencies because they encourage us to ask questions and may allow us to improve the way we do things.”

Christine Lagarde, who has just been nominated as the ECB chairman, has previously highlighted the threat posed by the encryption field, she said in an interview with CNBC.

"Everything that uses distributed ledger technology, whether it's called encryption, assets, or currency, is all about inciting the entire system. We don't want to shake the system so we lose the necessary stability."

But the encryption community seems to be welcoming Lagarde's appointment, eToro analyst Mati Greenspan wrote in a report to clients this week.

“Several people have told me that the next ECB chairman is very friendly to encryption. In fact, Lagarde, who took office on November 1st, is very supportive of digital assets. She has already advocated the issuance of cryptocurrencies by countries and like XRP and JPM Coin. Billing tokens. We can expect that people who are friendly to encryption in such a position will benefit the entire industry."

Image source: pixabay

By Liang CHE

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