During the webcast discussion in Switzerland, Federal Reserve Chairman Jerome Powell said that the Facebook’s stable coin, Libra would probably have so many users that it might cause instability in the financial system if something went wrong.
In a discussion in Zurich with Swiss National Bank Chairman Thomas Jordan, Powell claimed that.
“With Facebook’s very large network of more than a billion people. A stablecoin could have systemic implications very quickly. Libra would have to be held to the highest regulatory standards and expectations.”
According to Powell, if the libra stable coin is used across the globe, then it should be regulated as a systemically significant financial system. A designation that currently applies mainly to big banks like JPMorgan Chase.
In addition, Powell claimed that the Federal Reserve wants to see responsible financial innovation. So it’s important that we be open to Facebook’s proposal.
“We don’t just want to be an obstacle,” he added.
Moreover, Powell is unclear on how the current regulatory system will be able to protect the public from all the risks that come from cryptocurrency.
What is your view on Facebook’s Stable coin Libra?