Facebook’s Libra cryptocurrency could raise regulatory issues: BoE deputy governor

Facebook is getting a taste of the regulatory pushback it will face as it creates a new digital currency with corporate partners.

Facebook has unveiled its global crypto-currency "Libra," in a new initiative in payments for the world's biggest social network with the potential to bring crypto-money out of the shadows and into the mainstream. (AFP)

Plans by Facebook Inc to launch a new global cryptocurrency called Libra could raise regulatory issues, Bank of England Deputy Governor Sam Woods said on Thursday.

"It does seem clear that something like this could be very important from a regulatory point of view," Woods told a financial conference in Brussels, adding that regulators might have to think about the best treatment for this new asset class.

Facebook is getting a taste of the regulatory pushback it will face as it creates a new digital currency with corporate partners.

Just hours after the social media giant unveiled early plans for the Libra cryptocurrency, French Finance Minister Bruno Le Maire insisted that only governments can issue sovereign currencies. He said Facebook must ensure that Libra won't hurt consumers or be used for illegal activities.

"We will demand guarantees that such transactions cannot be diverted, for example for financing terrorism," he said on Europe-1 radio.

Facebook unveiled its much-rumoured currency Tuesday and said it will launch publicly early next year with such partners as Uber, Visa, Mastercard and PayPal.

Libra could open online purchasing to millions of people who do not have access to bank accounts and could reduce the cost of sending money across borders. It's easy to see how attractive an alternative like Libra could be to people in countries beset with hyperinflation such as Venezuela.

But Facebook already faces scrutiny over its poor record on privacy and its dominance in social media, messaging and related businesses.

(With inputs from AP)