Executives from some of the biggest American banks told the Federal Reserve that Facebook’s cryptocurrency Libra would pose a threat on monetary policies in the US, which has been reported in Bloomberg.
As the financial establishment has not been vocal enough about its resistance against Libra, their displeasure was noted in an official complaint to the central bank.
According to the minutes of this month’s Federal Advisory Council meeting obtained by the news agency, the banks said that “Facebook is potentially creating a digital monetary ecosystem outside of sanctioned financial markets — or a ‘shadow banking’ system.”
Likewise, the report said:
“As consumers adopt Libra, more deposits could migrate onto the platform, effectively reducing liquidity, and that disintermediation may further expand into loan and investment services.”
So, according to Bloomberg, members of the council include chief executive officers Rene Jones of M&T Bank Corp., Beth Mooney of KeyCorp, and Brian Moynihan of Bank of America Corp.
Meanwhile, as the c-suite bellowed, the two U.S. lawmakers, Rep. French Hill (R-Ark.) and Rep. Bill Foster (D-Ill.), echoed their concerns in a letter to the Fed, asking Jerome Powell, the Federal Reserve Chairman to consider creating a digital dollar.
Jerome Powell, Chairman of Federal Reserve
In July, 2019, Powell said that the Libra initiative raised “a lot of serious concerns,” including privacy, money laundering, consumer protection, and financial stability in his testimony about Libra in front of the congressional committee.
Hence, Senator Sherrod Brown from Ohio also questioned David Marcus, the Creator of Facebook’s Libra on whether the company is trustworthiness by listing a number of scandals ranging from Cambridge Analytica to racial massacres in Myanmar.
Brown said in an interview with Yahoo Finance:
“Facebook should stop Libra plans.” Senator Sherrod Brown
However, in France, Bruno Le Maire, the Finance Minister indicated that France will block Libra from Europe.
Maire said at the opening of an OECD conference on blockchain and cryptocurrencies in Paris, France:
“I want to be absolutely clear: In these conditions, we cannot authorize the development of Libra on European soil.” Bruno Le Maire
Thus, financial authorities in other EU countries including Switzerland also said that there would be a high level of oversight if Libra were ever allowed in their countries.