The Facebook-led Libra project is to face questions from 26 central banks over the perceived risks to financial stability posed by the cryptocurrency project.
On Monday, the Committee on Payments and Market Infrastructure – a forum for central banks under the Bank for International Settlements – will quiz the Libra Association in Basel, Switzerland, officials told the Financial Times. The attendees will reportedly include the Bank of England and the U.S. Federal Reserve.
European Central Bank executive board member Benoit Coeure will chair the meeting, at which Libra is expected to answer questions on its planned scope and structure. The central banks’ findings will be included in an October report for the G7 nations in October, an official told the FT.
On Friday, following a meeting of EU finance ministers in Helsinki, Finland, Coeure said cryptocurrency projects like Libra have raised “very strong concerns.”
In a report from Bloomberg, Friday, he reportedly said:
“We’ve got to look very carefully at these projects, the bar for regulatory approval has been set very high.”
Coeure added however, that Libra “has prompted fresh thinking on how to improve our payment systems.”
Libra will likely have to make a strong case for its plans, with regulators worldwide having voiced concerns over the project which would offer digital currency-based payments to Facebook’s billions of global users.
Most notably, perhaps, last Thursday, Bruno Le Maire, the French Economy and Finance Minister, threatened to block Libra in the EU saying:
“I want to be absolutely clear: In these conditions, we cannot authorize the development of Libra on European soil.”
The threat to national currencies from Libra has also prompted authorities to ramp up plans for central bank-based digital currencies.
The People’s Bank of China is reportedly rushing to launch its digital yuan in the face of Libra, with a special team working on the project in secret offices away from the institution’s headquarters.
In his Thursday comments, Le Maire also suggested that he has discussed the creation of a “public digital currency” with ECB president Mario Draghi and Christine Lagarde, who will take over his position later this year.
Coeure added Friday that it was time for regulators to “step up our thinking on a central bank digital currency,” according to the FT.
Benoit Coeure image via ECB/Flickr