Talking to BBC radio about a new Bank of England report The Future of Finance, governor Mark Carney was fairly balanced about Facebook’s Libra but said: “You can’t let a system develop that you have to use because it becomes so integral to everyday life.”
Carney, in response to the interviewer suggesting the report was written to address problems, Carney began defensively.
“There’s much more positive here about the future of finance. Start on the positive side…” he began.
“There are issues – the least well-off pay the most for their services,” echoing the words of Facebook chief executive Mark Zuckerberg.
“Credit… transferring… borrowing – the less well-off pay the most.”
“Half of businesses don’t have access to borrowing.”
Crypto on central bank balance sheets?
Then he moved on to the fintechs, of Facebook which is the newest, and how they can be part of the solution.
“There are new financial solutions possible that can address them.”
“You won’t notice what we do because it is to do with the plumbing… but you will notice some things. We can change bank payments so they are instant.”
“We can level that playing field… New fintech’s can have access to our balance sheet.”
Libra Investment Token will pay interest and could be the sort of security that central banks might consider holding, or may have too.
Facebook’s Libra “has got to be safe” says Mark Carney
So where does Facebook’s Libra fit in, is it a good idea or a danger?
How would it work, the interviewer asked it worried tones?
“It has to be safe or it’s not going to happen.”
“We, the Fed and all the major central banks and supervisors would have direct regulatory oversight.”
“Also, regulators like the FCA here in the UK would have oversight. We want to make sure data and privacy rights are protected.”
“Now, we have strong privacy rules as part of Europe.”
If Libra develops, won’t be “place for terrorists and criminals”
“People need to have the ability to be private but still access this system if it does develop.”
He continued: “It has to be the choice of the individual a true choice. You can’t let a system develop that you have to use it because it becomes so integral to everyday life.”
In his final comments on crypto-related matters he said: “We are not going to allow a network that comes into place for criminals and terrorists.”
Calls in UK for Carney to reveal details on secret Zuckerberg meeting
Regulators, politicians and central banks have been pushing back against Libra over the past few days.
There are also calls in the UK for Carney to reveal what he and Mark Zuckerberg spoke about in their secret meeting.
Whatever happens with Libra, it has boosted the bitcoin price as it closes in on $10,000.
What do you think about the possibility of stablecoin cryptos like Libra, and even proper public distributed crypto such as bitcoin, being held on central bank balance sheets? Leave a comment below