Facebook is facing high desertion alerts from the banks due to its forthcoming launch of Libra stablecoin. Recently, ING CEO Ralph Hamers has made a critical comment on the social networking giant saying, “Banks may cut ties with Facebook to prevent criminal activity.”
Libra is repeatedly meeting with stern regulatory pushbacks, with global authorities worried it could severely disrupt the financial system.
Facebook Near to Banks Censure
The Business and economics focused international news outlet Financial Times reported, about the apprehensions, which banks are facing while conversing with Hamers.
Reportedly, Hamers says that the Libra project has the potential to harm the banks and can ignite illegal activities in the market. To safeguard the financial systems, institutions like ING addressing it as a “gatekeeper to the financial system” may bound to stop working with Facebook, if the Libra stablecoin comes in the market without obeying federal regulatory concerns like anti-money laundering.
Hamer further mentions that ING is one of the largest and regulated financial institutions and they “don’t want to take any risk.” He further added, “His bank’s decision not to engage with a project, that believes it can improve financial inclusion for two billion unbanked and underbanked people worldwide.”
Interestingly, Hamer denoted the Libra project as a “good initiative to learn with” in the tech-forward approach.
Facebook ‘s Commitment Vs Regulators
It is mentioned by most of the media outlets including Financial Times and social media channels, about the respect that Facebook and Libra team is sticking towards the authorities. Whether it is David Marcus, Calibra CEO and former Facebook blockchain lead or it is Mark Zuckerberg, founder & CEO of Facebook, himself mentioned several times, about the commitment, towards fulfilling all the required norms of the U.S. regulatory body, concerning Libra project.
FT cites the note of a Facebook spokesperson:
“Facebook will not offer Libra through its Calibra wallet until Libra Association fully addresses the regulators’ concerns and receive appropriate approvals.”
Major Concerns Against Libra Project
Reportedly, money laundering is one of the major concerns, which all the major financial institutions and U.S. SEC is worried about. Libra, due to Facebook’s worldwide reach, has the hypothetical potential, to invite unimaginable criminals, to move money across the national borders quickly, and without any glimpse.
KoinPost earlier reported, about the withdrawal of the major Facebook’s Libra Association backers because of the constant regulatory and political interferences, and pressure on the internal supporters. These are big payments giants: Mastercard, Visa Inc, Stripe, Paypal, Mercado Pago, EBay Inc., fintech startup Stripe.
The United States Treasury Secretary, Steven Mnuchin has narrated the action of baking out by these players as a “default in Libra system,” and expressed Libra project is not “up to the par” with the American Anti-Money Laundering standards and other compliance issues.
Further, the article mentions that banks are taking cautious steps and keeping themselves away from the project until the final clarity comes in by the global regulators. The institutions are keeping an eye on how Facebook would take care of all the criminal concerns which are hovering on the impending project.
Recently, Jamie Dimon, JPMorgan Chase chief executive, at the Institute of International Finance’s annual meeting in Washington, labeled Libra as “a neat idea that will never happen.”
On the administration level, Lael Brainard, a Federal Reserve governor, asked the flawless commitment from Facebook, to solve all the matters related to money laundering, consumer protection, and user privacy before Libra launches in the United States.
Though all said and done until now, our eyes are looking forward to seeing how Zuckerberg would testify and defend Libra stablecoin before the House of Representatives Financial Services Committee on Oct 23.
KoinPost readers soon are updated on how the things moving around the Libra Project. Till then stay educated and excited.
Image by Simon Steinberger from Pixabay
Tags: Cryptocurrency News, Blockchain News, Facebook, Libra, Regulation, U.S., Jamie Dimon, ING Bank, Mastercard, Visa Inc, Stripe, Paypal, Mercado Pago, EBay Inc., Stripe, compliance, AML, Calibra, wallet, Mark Zuckerberg
[…] has announced the launch of Libra in June 2020. Libra stable coin is proposed to be pegged with the basket […]