The U.S. Department of the Treasury has expressed commitment in monitoring the Facebook-driven digital currency venture Libra.
The news was reported by Emanuel Cleaver, II, congressman for Missouri’s fifth district, on October 22. Cleaver said he’d kept in touch with the Financial Stability Oversight Council (FSOC), and the Office of Financial Research (OFR) in August, approaching the controllers “to proactively examine Libra and Calibra for possible systemic risk.”
Cleaver got a letter from once more from the Treasury, affirming that there are many “unanswered questions” over Libra. The division stated that as Congress “continues to examine these issues,” it would “closely monitor this market to address any regulatory gaps that it identifies.”
The Treasury included:
“It is unclear whether U.S. and foreign regulators will have the ability to monitor the Libra market and require corrective action, if necessary. This concern must be addressed if the Libra is to launch.”
With Facebook’s worldwide reach, Cleaver contended it’s “absolutely critical” that the undertaking be “stringently” inspected to guarantee the digital currency “does not pose a systemic risk to the global economy.”
While he commended Facebook’s endeavors for working with regulators on Libra’s concerns, Cleaver stated 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 said.
The revelation came a day before Mark Zuckerberg, CEO of Facebook, is set to testify before the House of Representatives Financial Services Committee about Libra and different issues.