After the announcement of Libra, Facebook is facing wrath from both regulators and lawmakers. However, Philip Hammond, the United Kingdom’s finance minister, wants only regulators to intervene and decide whether the social media giant will need a banking license for its crypto services.
“That is an issue for the regulators. We have an independent regulatory system as you do and that is essentially an issue for the regulators to determine, not for politicians to determine,” Hammond told CNBC.
The minister also revealed that the British government would “engage” with Facebook to launch the cryptocurrency.
“We’re not going to turn our back to it or try to stop it. We’re going to engage with it and try to work with others to ensure that it is effectively regulated,” he added.
Hammond also revealed that Facebook’s concept of introducing a blockchain-based currency across its social media platforms is good and if properly regulated, could be “a positive thing.”
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However, he is also aware of the negative implications of Libra and admitted that it could be an instrument of “great risk” and could become a tool for money laundering and terror financing.
Too big to control?
Facebook announced Libra last month and is planning to launch the currency next year. The California-headquartered company is targeting the lucrative remittance market, and with its 2.38 billion user base worldwide, it can capture it in no time.
Regulators and lawmakers around the world are concerned as Facebook’s crypto initiative would boost the crypto economy, which is already too hard to regulate.
US President Donald Trump recently lashed out against Bitcoin and Facebook’s upcoming digital currency on Twitter and demanded the tech company to receive a banking license if it wants to provide financial services.
Meanwhile, a bill has reportedly been drafted and discussed in the House, which is trying to keep big technology companies away from financial services.