Facebook Libra Coin Representatives Met with 26 Central Banks

Since announcing its global project, the Facebook coin Libra has been met with unprecedented regulatory scrutiny. Despite some founding members already getting cold feet, the Libra Association is still committed to launching its coin as soon as possible. For this reason, it has met with the ECB and several other central banks in Switzerland. However, the meeting may not bear fruit considering the recent statements from top EU officials.

The Facebook Libra coin is still highly criticized

On September 16, representatives from the European Central Bank (ECB), along with 25 international central banks, held a meeting with the founding members of the Facebook Libra coin in Switzerland, that might grow into a 19 billion dollar project. As another step towards progressing in the increasingly uncertain regulatory landscape, both sides will discuss the financial stability risks that Libra may pose. While Libra is committed to following any possible regulations that it may face with, statements coming from key leaders in the financial world do not seem promising.

According to a report from the Financial Times, the Facebook Libra coin founders met with representatives from the Committee on Payments and Market Infrastructure (CPMI). The Committee includes 28 banks and falls under the control of the Bank of International Settlements (BIS). Notable members include the Federal Reserve bank of New York, the Bank of England, and the Deutsche Bundesbank.

Ever since announcing the launch of Facebook Libra coin as a new global cryptocurrency, the project met with severe resistance from both governments and financial institutions. Due to the controversy over Facebook selling private user data to different entities, financial and political spheres fear that the company may take similar measures with their crypto project. As countermeasures aimed at improving transparency, the Libra Association announced the Libra Bug Bounty Program. Users who can find bugs in Libra and who inform the developers about them, can receive a reward of up to 10.000 USD.

Benoit Coeure, one of ECB’s board members, stated that the EU will set a high bar for regulatory requirements, which will be applied to the Facebook Libra coin and similar cryptocurrencies. Coeure said that financial instability is one of the main reasons behind their regulatory scrutiny.

Central banks are already planning to launch their own digital currencies

Coeure added that the ECB planned on making its own bank-issued cryptocurrency even before the announcement of the Facebook Libra coin project, stating that the European Union should have its own national cryptocurrency to fend off against the rise of the disruptive technology.

Their push for a bank-issued digital asset mirrors the situation in China, where the People’s Bank of China (PBoC) worked on a similar project since 2014. The deputy director of the PBoC recently announced that their project may be released by the end of the year, while some sources indicate that the currency will only be launched in some parts of China such as Shenzhen, before spreading nationally.

Several Finance Ministers have recently met in Helsinki in order to discuss recent events concerning the implications for financial sphere that the Facebook Libra coin might have. The French Minister of Finance, Bruno Le Maire, has also stated that Europe should ‘challenge’ Libra and create a national digital asset, naming it the ‘EuroCoin.’

Considering all of the recent statements from top European officials, the likelihood of a successfull launch of the Facebook Libra coin does not seem promising. Officials such as Thomas Heilmann, a member of the German parliament, stated that the German government is planning to go as far as to block the launch of the Libra coin altogether.