The questions include whether Libra will be an open platform for commerce, what currencies will be accepted and whether organizations or individuals who use the currency will get “a special advantage.”
Margrethe Vestager, the European Commissioner for Competition, is asking tough questions of Facebook over its proposed leap into cryptocurrency.
The comments were made in an interview with Sweden’s Finansforbundet picked up by Bloomberg.
“It’s a new thing that we’ve begun to ask questions about something that doesn’t yet exist”, Vestager said.
Despite these unknowns, Vestager is keeping an open mind to a range of potential outcomes at launch:
“There may be a problem that you get a completely closed ecosystem that has nothing to do with the rest of the economy”, she said, later adding, “You can do it in a way that is open to competition, in terms of the way you pay.”
The European Commission launched an investigation into the Libra Association’s potential anti-competitive behavior in August. The scope of the investigation includes the impact on users’ data and the integration of Libra into Facebook owned Whatsapp and Messenger.
“We want to be far enough ahead that we can say whether this will be a problem”, Vestager said. She noted the commission isn’t the only organization with questions of Libra, “It may be that our central banks will be most interested in it.”
Transparency has been a recent flashpoint in the public conversation surrounding Libra.
Yesterday, previously unheard-from Libra Association members expressed discontent over the regulatory scrutiny of the project. And it took a leaked transcript of a closed-door meeting to hear Facebook CEO Mark Zuckerberg’s thoughts on the firm’s approach.
FATF Says US ‘Largely Compliant’ With Virtual Currency Recommendations
The intergovernmental standards group published its assessment of the U.S.’s compliance with its banking rules, evaluating laws and regulations around digital assets and other areas on Tuesday.
That’s not to say the U.S. is completely in line with the current “New Technologies” standards, known by FATF as “Recommendation 15”, though. The most powerful member of FATF’s global financial crimes network retains “minor deficiencies.”
For example, U.S.-registered money services businesses need only keep detailed records for transactions of $3,000 or more. That’s three times higher than FATF’s required due diligence trigger, and could, in the watchdog’s view, let bad actors slip through.
“This higher threshold is not clearly supported by low ML/TF risks”, FATF wrote.
U.S regulators also lag in their investigation of convertible virtual currency (CVC) businesses, according to FATF. Their strategy “does not specifically identify higher risk virtual asset service providers (VASP)”, making their “various” examinations of high-volume exchanges and peer-to-peer networks insufficient.
“Therefore, it is not entirely clear whether the current approach is sufficiently risk focused, especially since only 30% of all registered CVC providers have been inspected since 2014”, FATF wrote.
Legislative gaps could also allow extremely niche VASP activity to evade detection and enforcement. A U.S.-registered VASP that only did businesses with non-U.S. persons would not, apparently, be subject to current law.
FATF nevertheless praised U.S. regulators’ recent efforts in the virtual asset space, especially the Financial Crimes Enforcement Network’s May 2019 guidance paper for CVC activity.
FATF found that the U.S. remains “largely compliant” with Recommendation 15.
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