An ING executive has warned that banks may be forced to drop Facebook as a customer, if it persists with its plans to develop the Libra project. The executive is concerned that Facebook may continue its project without addressing the regulatory concerns it has been confronted with.
In an interview with the financial times, ING CEO Ralph Hamers said that the Libra project’s unresolved issues placed a degree of risk on banks; who are the “gatekeepers of the financial system.” He added that the potential for Libra users to evade anti-money laundering standards and commit “financial crimes” may force banks to “take measures and exit the client, or not accept the client.”
Facebook’s Libra project has been confronted with regulatory questions. This saw several prominent payment operators such as Visa, Stripe, and MasterCard abandon the project. A Facebook spokesperson said that the firm was ready to work with regulators as a member of the Libra association.
“From the beginning, we’ve said we’re committed to taking the time to get this right. The Libra Association published a white paper to begin a dialogue with the regulators and policymakers who oversee the stability and security of our financial systems. As a member of the Libra Association, we will continue to be a part of this dialogue to ensure that this global financial infrastructure is governed in a way that is reflective of the people it serves. Facebook will not offer Libra through its Calibra wallet until the Association has fully addressed regulators’ concerns and received appropriate approvals.”
Facebook CEO Mark Zuckerberg is just hours away from making his testimony on the floor of congress just three months after his head of Blockchain David Marcus, made a similar presentation. In a written testimony released hours before the presentation, the Facebook CEO addressed fears that Libra was trying to disrupt monetary policy and compete with national currencies. He also said that Libra had the potential to provide banking services to the world’s 1.7 billion unbanked population stating that;
“The financial industry is stagnant and there is no digital financial architecture to support the innovation we need. I believe this problem can be solved, and Libra can help.”
Zuckerberg assured regulators that Libra had no intention to interfere with monetary policy by offering to work with regulators.
“We expect the regulatory framework for the Libra Association will ensure that the Association cannot interfere with monetary policy. Libra is also being designed with economic security and stability in mind, and it will be fully backed through the Libra Reserve.”