Fed director: Libra faces "a series of core legal and regulatory challenges", including how to link to underlying assets

According to foreign media today, Fed director Lael Brainard launched an attack on Facebook's Libra digital currency project on Wednesday, saying it faces "a series of core legal and regulatory challenges", including how to interact with a series of Underlying assets.


Image source: Pixabay

Brainard said that Facebook's Libra concept is "stable currency" (a digital currency associated with a government-backed currency or other sound asset to avoid drastic fluctuations in pure cryptocurrencies like Bitcoin), which has not yet It was confirmed that the rights of consumers were not clear.

Brainerd said in preparation for a conference in Frankfurt,

"If it continues, what sets Facebook Libra apart is that a network of active users representing more than a third of the world's population is combined with the issuance of private digital currencies that are opaquely tied to a basket of sovereign currencies. If Without the necessary safeguards, the global stablecoin network could put consumers at risk. "

Her remarks suggest that Facebook's Libra project has not yet received attention from major regulators. As an alliance of conglomerates, the alliance will back digital currencies with hard assets, but with the withdrawal of major payment companies such as Paypal, Mastercard and Visa, Libra has suffered other setbacks.

Central banks around the world are debating how to manage advances in digital financial technology, especially the distributed ledger system used by Bitcoin. Some analysts believe that the central bank will eventually inevitably issue its own digital currency.

Brainard said that this technology has the potential to reduce costs and speed up remittances, and indeed has advantages. But she said that based on the physical cash issuance, "the current arrangement is also good."

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