Since Facebook released its stablecoin Libra on Tuesday, crypto industry insiders and the public alike have been waiting with bated breath for what some of the world’s most powerful people have to say about it.
On Wednesday, Jerome Powell, the chairman of the Federal Reserve — arguably one of the world’s most powerful financial institutions — name-dropped the initiative. And interestingly, his sentiment wasn’t exactly harrowing.
Some claim that this bodes well for Bitcoin, as it could imply that the leading decentralized cryptocurrency won’t come under direct pressure from monetary authorities just yet. Because if the entity believes Facebook isn’t big enough to pose concerns, won’t they think the same of Bitcoin or something like Ethereum?
Fed Chairman Unfazed By Crypto
On Wednesday, the Federal Reserve concluded its policy meeting with a press conference. While the event focused mostly on the U.S. Central Bank’s decision to keep rates steady, a fiscal move which the stock market reacted positively to, one reporter asked about Libra, the cryptocurrency venture of Facebook, Visa, Mastercard, Spotify, Uber, Lyft, and countless other giants.
According to The Block’s Ryan Todd, who was watching and annotating the event, Powell responded to the inquiry stating that it’s a “long way from digital currencies impacting monetary policy.” Powell’s latest comment is reminiscent of one he made in 2018, which is when he stated that Bitcoin isn’t currently large enough to pose a threat to centralized finance.
Powell on Libra: “Long way from digital currencies impacting monetary policy. Facebook has made rounds with regulators around the world to discuss plans, including us (Fed). There are benefits and RISKs we’re watching, and echo the statement BoE Governor John Carney issued.”
— Ryan Todd (@ryanjtodd_) June 19, 2019
During this latest press conference, the regulator reassured listeners that Facebook has taken part in proper discussions with the Federal Reserve and presumably similar bodies across the globe. Powell concluded by stating that his team will monitor Libra’s development for benefits to the economy and risks to society at large.
Powell’s tone towards Libra is quite different than the sentiment put forth by other American politicians and economists.
As reported by Blockonomi yesterday, Maxine Waters, a House Representative, has called for Facebook to halt Libra in its tracks. She is fearful about “national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies,” citing Facebook’s “troubled past” (privacy imbroglios).
And more recently, the Senate’s Banking Committee has, according to crypto lawyer Hailey Lennon, scheduled a meeting with Facebook on July 16th for discussion of the firm’s plans in cryptocurrency.
????Senate Banking Commitee will hold a hearing on @facebook's crypto plans on Tuesday, July 16????
— Hailey Lennon (@HaileyLennonBTC) June 19, 2019
Other Regulators Worried
Despite the reassuring comments from Powell, many across the globe are worried about Libra and the potential threats it could be for finance. Reported first by Russian media outlet TASS, a lead financial regulator in Russa, Anatoly Aksakov, claims that Libra will not be legalized in the nation.
He, unlike Powell, believes that the cryptocurrency may actually harm traditional finance. Aksakov adds that he intends to restrict the creation of platforms that allow for the purchase of Libra, but noted that he wouldn’t look to crack down on foreign services operating in Russia.
Aksakov isn’t the only one worried. Mark Carney, the Governor of the Bank of England, has pledged that Libra will be heavily scrutinized and regulated, citing the cryptocurrency’s potential to be widely adopted from the get-go.
French Finance Minister Bruno Le Maire followed suit with a similar comment, claiming that under no circumstances should Libra “become a sovereign currency.” Le Maire elaborated that he is worried about how this new digital asset can be used to harvest data, launder money, and finance terrorism:
“This money will allow this company to assemble even more data, which only increases our determination to regulate the internet giants.”
It is clear that save for Powell and a few other regulators in the U.S., most governments are wary of Libra and the potential it has to disrupt finance.