Central Bank of UK Sets Up Provisions for Facebook's planned Libra

Midhat Ali Shaikh by Midhat Ali Shaikh - 08:02 AM Oct 11, 2019

Central Bank of UK Sets Up Provisions for Facebook's planned Libra
The central bank of the United Kingdom has set up strict rules for facebook's proposed Libra. So, the Libra must pursue the provisions in order to be released in British soil, as stated by Reuters on Oct 9, Wednesday.

The Bank of England (BoE) revealed its exclusive Financial Policy Summary and Record at the Financial Policy Committee (FPC) meeting that took place on Oct 9.

Initiation of Fresh Payment Networks

The Financial Policy Committee revealed the need for new payment systems like Libra. Just because to comply with high-level benchmarks of resilience and fall under relevant supervisory oversight. Furthermore, the FPC committee requested the regulators to embrace the 'terms of engagement' for advanced and fresh payment system before their launch. Bank of England's FPC stated in a policy document:

“Libra has the potential to become a systemically important payment system. The terms of engagement for innovations such as Libra must be adopted in advance of any launch. U.K. authorities should use their powers accordingly.” 

The document further reads, “The resilience of the proposed Libra system would rely on the stability of not just the core elements of the Libra Association and Libra Reserve but also the associated critical activities conducted by other firms in the Libra ecosystem such as validators, exchanges or wallet providers.”

In May, Governor of BoE, Mark Carney stated the central bank should get ready for a "fourth industrial radical alteration" that includes impacts on payment systems via blockchain and decentralization.

Furthermore, Carney stated at Innovative Financial Global Summit, the central bank will promote advancements among Fintech corporates. He said:

“new finance can unlock more sustainable and inclusive growth, provide consumers greater choice, [provide small business (SMB)] access to credit to grow – all of which ensures the financial system can become more resilient.”

 Policy Makers and Regulators' Cynicism for Libra 

 At the start of October, Randall Quarles, the chairman at the Financial Stability Board made a claim. Said, Libra could come up with the new scale and scope for the industry.

Quarles said:

“Although there is a small risk to financial stability today. Still there is no doubt the potential scale of stablecoins and other crypto-assets yet to emerge may pose regulatory challenges.”

Facebook declared Libra's launch in June and was affirmed with the statement that it will a "global currency" surely.

However, recently, the German Finance Minister showed cynicism towards Facebook's proposed Libra. And said that he will not give it permission to be authorized on Europe land. And so did french minister to the libra. Both of the ministers took this step against Libra to save countries' financial sovereignty.

About The Author
Midhat Ali Shaikh

Midhat Ali ShaikhMidhat ali shaikh is a freelance content writer and is involved with renowned organization named knovatek pvt. ltd. also serving for vmatchu and nghostings