If Libra were to be used in the United Kingdom, the cryptocurrency would have to meet the ‘highest standards’ of regulation states the Bank of England (BoE). The Financial Policy Committee (FPC) of the BoE recently had a meeting that covered the upcoming preparations for Brexit.
Besides traditional finance, the committee also had to identify potential risks that could be caused by cryptocurrencies. The FPC claimed that the United Kingdom’s economy would remain stable in the case of a no-deal Brexit. As for possible problems, the committee proposed that EU officials should work on preventing disruptive cross-border financial services in the case of a no-deal solution.
Concerning Facebook’s controversial crypto project, the FPC released one of its most up-to-date verdicts on the subject, only a day after the EU announced that it would create a new framework for digital currency payment systems.
UK’s Central Bank reportedly stated that it will apply existing laws to Libra for the time being. However, the BoE warned Facebook that ‘the terms of engagement for innovations such as Libra must be adopted in advance of any launch.’
Commenting on the project, the FPC stated that Libra has the prospective of becoming a ‘systemically important payment system.’ The Committee believes that Libra and similar projects should meet the highest standards of resilience and should be under relevant supervisory oversight.
The UK might not have to worry about not having time to prepare a regulatory framework for Libra, as the project faces major uncertainty over its fate. Recently, PayPal has officially announced that it would no longer be a part of the Libra Association, which some view as a heavy blow to the project.
Only a few days after the announcement, two U.S. Senators publicly asked Mastercard, Stripe, and Visa to renounce their membership in a similar fashion. If the three companies were to seriously consider the proposal, Facebook would be left without some of its strongest backers.
Will Libra even launch?
Several players in the cryptocurrency sector shared their predictions concerning the possible launch date of Libra – such as the CEO of Ripple Brad Garlinghouse who believes that the project would not launch before 2023. However, we are left with the possibility that Libra will not launch at all, which was confirmed as a real possibility by Libra representatives in the case that regulatory pressure would continue.
As a reminder, Facebook officially announced the project in June this year. The project was originally backed by the Libra Association, which at the time had 28 members. Mark Zuckerberg stated that he aimed to launch the stable coin cryptocurrency somewhere in 2020. With the latest news in mind, it seems that Zuckerberg will have to deal with a number of issues before he successfully launches Libra, which could potentially be used by up to 2.3 billion Facebook users.