WASHINGTON-Federal Reserve Chairman Jerome Powell and legislators in both parties expressed great concern
We intend to create a transparency-based payment network, describing both the statutory and regulatory scrutiny that the project may have.
Mr Powell, speaking to the Senate Banking Committee on Thursday, questioned the possibility of launching the digital medal, entitled Libra, on the Facebook-focused timeline.
“I think we agree that Libra raises many serious concerns, which will include privacy, money laundering, consumer protection, financial stability,” he said. “These must be thoroughly and publicly assessed before proceeding.”
Mr Powell, in the second day of evidence on Capitol Hill, reiterated the fact that the FED could cut interest rates this month to boost the US economy, since there is a risk that global growth will be slowed down. uncertainty about trade disputes.
“The baseline is, the economy is very good, and we want to use our tools to keep it there,” said Mr Powell as evidence that his statements were echoed on Wednesday before a Committee. House Financial Services. Investors in that language are clear that it will mean that the central bank will reduce rates at the next policy meeting in July 30-31.
Senators spent most of the time asking Mr Powell about Libra, a criptocurrency planned by Facebook and more than two dozen other companies. The coin will be hung with a basket of currencies issued by the government, and users could send it to each other electronically and use it to make purchases on Facebook and the internet.
The Seanad Banking Committee and the House Financial Services Committee are due to hold hearings on the initiative on Tuesday and Wednesday. Mr Powell said that a staff group is looking at the implications of Libra.
“The idea that this would be implemented within 12 months will not, I believe, be properly proven,” he said. “I think we will take more time than that.”
Economists say that Libra has the potential to interfere with previous global finances than criptocurrencies, which have been unsuccessful at retail level and have experienced huge swings, making them less attractive. 39. the government issued money. The Libra could be different, partly because 1.56 billion daily Facebook users give him a chance to accept it widely.
But the same characteristic would add to the need for regulatory oversight, Mr Powell said.
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“The size of the Facebook network means that it could, in essence, be systematically important immediately,” said Mr Powell on Thursday. “This should be subject to the highest level of privacy, but also prudential regulation.” T
Facebook acknowledged so much. In a note this month, Libra project leader, David Marcus, said the company is committed to “a collaborative process with regulators, central banks and law makers.”
“If this is not done right, there may be systemic risks that nobody may have,” said Mr Marcus, who is slated to give evidence on Tuesday at the Seanad hearing.
A Facebook spokesperson, in an e-mail statement, showed Mr Powell's statement Thursday “that everyone wants to start the recommendation that they want innovation to happen.” She said that the company is aligned with the Fed chair of the need for public discourse and not too fast.
However, the leaders of conference committees overseeing financial regulation expressed doubts about the project.
Sen. Sherrod Brown (D, Ohio), the best Democrats on the Senate Banking Committee, said Thursday that Facebook's Facebook attempt was “to build up the role of government,” adding that “the company has achieved its own wealth”. and power. ”
“So now, along with Wall Street's complex and hazardous banks, we face new risks from high-tech, non-technical companies with huge amounts of personal data with the intention of, as far as I can say, steering monetary policy. on their own terms, ”Mr Brown said.
One central issue with Libra, Mr Powell, stated that one existing regulatory agency would not be authorized to oversee it. The Fed, for example, does not supervise banks, although Sheila Bair, former chairman of the Federal Deposit Insurance Corp, claimed that he was dealing with Yahoo! Monday Finance should give Congress to the chief authority of regulating the Libra to regulate.
The Chairman of the Senate Banking Committee, Mike Crapo (R., Idaho) asked Mr. Powell could the project seek to create a new data-oriented regulator.
“I think that's the question we need to focus on,” said Mr Powell.
President Trump said on Twitter late Thursday that he is not a fan of core currencies, saying that “the value is susceptible and based on thin air.” T
“Unregulated Crypto Assets can facilitate illegal behavior, including drug trafficking and other illegal activity,” he wrote. “Facebook Libra's“ virtual currency ”will have little or no dependence”.
Write Paul Kiernan at firstname.lastname@example.org
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