Facebook-led stablecoin project, Libra has managed to grab the attention of financial leaders all around the world, surprisingly, for all the negative reasons. It has been subject to backlash from regulatory authorities globally concerning its vulnerability to upset the financial scenario in the future.
However, the recent news about the Bank of England coming out with a set of principles designed specifically for Libra project to adopt before going live in the UK is surely brought relief for the social media giant. The UK’s central bank has come out to embrace the Libra project irrespective of the ugly criticism bombarded upon the highly anticipated digital currency.
The BOE’s Financial Policy Committee released the October Financial Policy and Summary report this week, which categorized the Libra payment network as a potentially “systemically important payment system.” The policy summary further reads that “The FPC judges that such a system would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight.”
Philip Hammond, the respected Chancellor of the UK, stated that Britain is not keen in restraining Libra by creating walls for its penetration in the marketspace rather the system is working hard to frame out effective regulatory measures and regulations which will foster Libra as well as other financial innovations to expand and create a new payment solution like in cross-border transaction mechanism.
The Libra Association, along with the corresponding reserve of the array of fiat currencies supporting the network, all will be under the scrutiny by the regulators. Network participants, crypto exchanges listing the Libra as well as Libra compatible wallets will also be under the purview of jurisdiction.
The committee quoted that,
“The resilience of the proposed Libra system would rely on the stability of not just the core elements of the Libra Association and Libra Reserve but also the associated critical activities conducted by other firms in the Libra ecosystem such as validators, exchanges or wallet providers. This emphasised the need to ensure end-to-end resilience.”
It will be quite interesting to observe what the future holds for Facebook’s cryptocurrency- Libra, which is all set to hit the marketspace by the first quarter of 2020.