Facebook will have to respond and provide for the concerns of European Union regulators in a new round of talks scheduled for Monday, Reuters reported. The meeting in Basel will bring together representatives of the 26 central banks, who will ask key questions about the Libra model.
Libra representatives will be accountable to the International Settlements Bank Payment and Market Infrastructure Commission.
So far, only central bankers and officials have voiced particular concerns about Libra’s potential to disrupt EU monetary policy, or to affect divided countries. The impact of Libra as a competition on fiat money is one of the biggest concerns.
Facebook has also faced a backlash based on previous reports of misuse of user data, as well as privacy concerns.
The EU will set a very high bar for regulatory approval, said Benoît Coeuré, of the European Central Bank, who will also chair the meeting. The humor of European regulators was already set during a recent meeting of European finance ministers in Helsinki. EU countries’ representatives shared “strong concerns” that Libra could destabilize the local financial system.
Apart from the EU, Facebook has been serious about the demands of US regulators. Earlier, representatives of the Libra project have stated that there will be no partial, regional release until US regulators are satisfied with the plans.
The scales will be backed by a basket of currencies, including the euro. This means that specially appointed units will give up the economy and maintain it, exchanging it for Libra. It is unknown what size this operation may be, and whether it will challenge the banks’ liquidity or monetary policy.
Generally, fintech money holders always face some restrictions on the circulation and retention of cash.
At the same time, the EU has been pretty lenient about cryptocurrency. As long as compliance is secured, money holding licenses have been issued for multiple cryptocurrency companies. Local regulations in Estoina and Lithuania are particularly suitable for crypto startups, with the extreme ease of starting a business./Cryptovest.com