(BlockBar) The chairman of the Federal Reserve, Jerome Powell says that the current regulatory system is powerless for Libra. Bitcoin may replace the dollar someday.
On Thursday, Powell reiterated his concerns about Facebook’s encrypted currency, Libra, at a hearing on the Senate Banking Committee. He expects Libra to be an important issue at the upcoming G7 finance ministers meeting.
Powell told members of the Senate Banking Committee that “no institution can come forward to monitor it. We have no right to apply those privacy rules that used in banks to Facebook or Libra. He told Mike Crapo, chairman of the committee, that the government might need to set up a new institution to address the problem. Because “in our current regulatory system, obviously there is nothing we need at all.” He also said that “the size of Facebook means that it may be of great systemic importance. This should be subject to the highest level of privacy protection and prudent supervision.
In addition, at the hearing, legislators expressed concern about the threat to the financial system posed by Bitcoin and other encrypted currencies and the possible challenge of replacing the dollar with Bitcoin. Powell said he did not think Bitcoin was a widely used payment method. However, he points out that in the global economy, Bitcoin has increasingly replaced gold as a value reserve. Powell acknowledges that it is possible for Bitcoin to replace the dollar in the long run. He also stressed that the United States should not assume that the dollar’s status as a reserve currency will last forever.
According to reports, Powell also said, “Libra may have an impact on privacy, money laundering, consumer protection, financial stability and other issues. These concerns should be thoroughly and openly addressed. We hope that the innovation of encrypted currency can be carried out in a safe and healthy way. Mark Carney, governor of the Bank of England, also commented on Facebook’s encrypted currency, Libra. “If it succeeds, it will become systematic because it will involve a large number of users. It must always work properly and should not go wrong. ” Other issues Libra needs to consider include the absence of any underlying risks when transferring funds, how to manage underlying assets, and how to deal with money laundering and terrorist financing. He pointed out that, libre have to be rock solid from the beginning, or rather not starting at all.”
Bruno Le Maire, minister of France’s Treasury department, also reiterated his objection to the idea that Libra’s becoming a “sovereign currency”. “I want to make sure that Facebook’s Libra project does not become a sovereign currency that can compete with national currencies,” he said, “Because I will never accept a company as a private kingdom.”
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