The U.S. Department of the Treasury has committed to monitoring the Facebook-led cryptocurrency project Libra.
The news was announced by Emanuel Cleaver, II, congressman for Missouri’s fifth district, on Tuesday. Cleaver said he'd written to the Financial Stability Oversight Council (FSOC), and the Office of Financial Research (OFR) in August calling on the regulators to "proactively examine Libra and Calibra for possible systemic risk."
Cleaver received a letter from back from the Treasury yesterday, confirming that there are many "unanswered questions" over Libra. The department said that as Congress "continues to examine these issues" it would "closely monitor this market to address any regulatory gaps that it identifies."
The Treasury added:
With Facebook's global reach, Cleaver argued it's "absolutely critical" that the project be "stringently" examined to ensure the cryptocurrency "does not pose a systemic risk to the global economy.”
While he applauded Facebook's efforts to work with regulators on Libra concerns, Cleaver said it has "the potential to update – or upend – our financial system."
"As Facebook works down this regulatory road, it is imperative that we affirm that terror financing and money laundering is not advanced through Libra, and, according to FSOC, significant concerns remain,” he concluded.
Treasury image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.