The
International Monetary Fund (IMF) has called on global regulators to
pay attention and take proper regulatory action regarding Facebook’s
Libra.
Speaking with Reuters on July 17, Gita Gopinath, chief economist at the IMF, urged
the global regulatory community to pay serious attention to Facebook’s
crypto project during the early stages of its development. Gopinath
emphasized that global financial regulators should act immediately to
ensure that they are not too late in taking the necessary measures.
Gopinath
outlined the major risks associated with the stablecoin, including
concerns about data privacy, consumer protection, as well as “backdoor
dollarization.” Still, the IMF economist admitted that Libra could help
boost financial inclusion.
Gopinath’s remarks come amid a hearing
on Libra at the United States House of Representatives Financial
Services Committee. Lawmakers in both the House and the Senate criticized Facebook’s past behavior in regard to data privacy and consumer protection.
Regulators Already Evaluating the Risks of Libra
Meanwhile,
a number of global jurisdictions have expressed their concerns towards
Libra and have begun investigating the forthcoming coin. Japanese
authorities recently launched an investigation of the impact of Libra on monetary policy and financial stability.
Previously, India’s authorities claimed that the government would not be comfortable with a private cryptocurrency. On July 8, China’s central bank announced
it started developing its own digital currency in response to
Facebook’s Libra as it could pose a risk to the country’s financial
system.
Other authorities are less skeptical. Bank of England governor Mark Carney recently claimed
that people need to acknowledge the issues that Facebook is trying to
solve with Libra, despite the potential downsides of the project.
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