Jerome Powell said the Facebook-created coin raises concerns about the privacy and protection of consumers, as well as about money laundering and the stability of financial systems. The Fed has set up an internal working group to review Libra and cooperate with other central banks, Powell told the U.S. House Committee on Financial Services on Wednesday. (Reuters)
Talking point: The Fed chair is one of the most important financial regulators in the world, but it’s not clear that those powers extend to slowing down or stopping Libra’s development. Digital currencies don’t “fit neatly or easily within our regulatory scheme,” Powell told the committee. Facebook and its partners in the Libra Association have not heeded earlier calls from committee chair Maxime Waters to put the coin on pause until elected officials have held hearings on it. Next week, G7 governments and regulators will indicate what consumer-protection or anti-money-laundering rules they might impose on Libra and other stablecoins when a French-led task force delivers its first report at a meeting of finance ministers and central bank governors. Domestically, both the Department of Finance and the Bank of Canada are contributing to the study, but the former told The Logic it’s seeking more details from Facebook and its partners, and hasn’t yet determined if the coin will be subject to its regulations.