The Monetary Authority of Singapore (MAS) recently had a discussion with Facebook over its upcoming digital currency and is seeking more information from the company.
According to a Bloomberg report, the central bank officials are concerned about the functioning of Libra.
In a media briefing on Thursday, Ravi Menon, managing director of MAS, said: “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.”
He also pointed out the potential benefits of the digital currency and acknowledged the social media giants attempt to make the payment system cheaper and bank the unbanked.
The current cross-border payments system is “expensive, inefficient, sometimes risky,” Menon added. “Libra offers a very interesting proposition that could help to address” those issues.
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He has asked for more information about the digital currency as well as reports on the current conditions of cross-border payment systems.
“At this point it’s not clear whether it offers a distinctly superior proposition to existing electronic payment mechanisms,” Menon said. “We need to understand how exactly it’s going to work.”
Changing the financial ecosystem
Facebook officially announced its digital currency earlier this month and put forth its ambitions to reshape the remittance industry bringing a blockchain-based currency to its 2.38 billion users. This, however, opened the eyes of regulators and lawmakers across the world as many believe that this might disrupt the existing banking system.
In the United States, the social media company will also face hearings before the Senate and the House next month. Due to its troubled past with data privacy, Facebook has to explain privacy issues before both.
Meanwhile, authorities in the United Kingdom, Italy, and France raised concerns about Libra and asked for a thorough examination of the digital currency.