BOE's Mark Carney Says Facebook Token Must Be ‘Rock Solid’ From Start
(Bloomberg) -- Facebook Inc.’s Libra cryptocurrency will have to be bulletproof from day one, says Bank of England Governor Mark Carney.
“If it’s successful it becomes systemic because it would involve a very large number of users and if you’re a systemic payments system it’s ‘five-sigma,’’’ said Carney, referring to a threshold scientists are often held to in proving test results. “You have to be on all the time, you can’t have teething issues, you can’t have people losing money out of their wallets. The standards are in a different zip code, to use the American term, to the standards in other technologies.’’
Carney’s comments at a Thursday press conference in London come a day after Federal Reserve Chairman Jerome Powell told lawmakers in Washington that Libra raises “many serious concerns regarding privacy, money laundering, consumer protection and financial stability.” Policy makers from France to Australia have poured scorn and criticism on the social-media giant’s intentions, questioning how it will affect everything from data privacy to financial stability.
Carney said the Libra initiative posed a “very broad range of issues’’ and that the Group of Seven central bankers, including the BOE, were looking to understand Facebook’s proposal and consider both the risks and opportunities.
The BOE Governor said last month the U.K. central bank approaches Libra with “an open mind but not an open door.” He’s starting consultations on allowing new payment providers such as Libra to hold reserves at the central bank for the first time.
“This is not learn on the job stuff,’’ Carney said on Thursday. “It’s got to be rock solid right from the start, or it’s not going to start.’’
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