Singapore’s Central Bank Has Some Serious Reservations about Facebook’s Cryptocurrency

Singapore’s Central Bank Has Some Serious Reservations about Facebook’s Cryptocurrency

by June 28, 2019
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The Monetary Authority of Singapore is now among the regulators that have expressed reservations about Facebook’s upcoming cryptocurrency, Libra.

The central bank sees significant obstacles in Facebook’s way, according to a Bloomberg report, and they are “not trivial”.

Ravi Menon, MAS’s Managing Director said:

ravi menon mas fintech festival 2018-regtech-singapore

“The key challenge is to figure out the nature of the beast. What is it more like and which box we can put it into. At this point we are not sure yet.”

MAS is one of the many regulators who have opened up discussions with Facebook about its plans for a new cryptocurrency, and joins others in expressing reservations about the social media giant’s plan to merge cryptocurrency with the heavily regulated financial ecosystem.

France’s Finance Minister, Bruno Le Maire, balked at the idea and said that “it’s out of the question” for the cryptocurrency to compete with sovereign currencies.

The US House Financial Services Committee Chair Maxine Waters meanwhile, promised an aggressive response from Congress, and the former European Central Bank Vice President Vitor Constancio called the initiative “unreliable and dangerous” said Bloomberg again.

That was just the first shot in a torrent of criticism and skepticism from policy makers around the world. U.S. House Financial Services Committee Chair Maxine Waters promised an aggressive response from Congress. Former European Central Bank Vice President Vitor Constancio called the initiative “unreliable and dangerous”.

We think that the global regulators’ response to Facebook’s preposition is not without merit.

The idea that this cryptocurrency will not be truly governed by any of the familiar stewards, but a multi-billion dollar private company will surely raise hackles.

To add insult to injury, the private company in question is Facebook.

Facebook already has a lot of power and a questionable track record when it comes to stewarding our data, in a series of events that forced Mark Zuckerberg to testify in congress. The social media giant has hired high-ranking individuals with finance backgrounds to spearhead the project, but of course it is natural to remain hesitant of the organisation’s track record.

Some industry observers are calling this the start of a new world order, and that may very well be so. However, it will definitely be met with stiff opposition from the current guard.

What is clear is this: while MAS may be concerned with which box to put the cryptocurrency into, many are already looking to a future where these boxes become obsolete.

So do we trust Facebook with this future?

Image Credit: Institute of Policy Studies’ photo on Flickr 

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