Among the regulatory and partner turmoil of Facebook’s Libra coin, including scepticism from the US government on the oversight of the project, as well as the loss of critical payment processing partners, such as Visa, Paypal and Mastercard, the Bank of England today announced the release of its October Financial Policy and Summary in which it explains that the Libra coin would need to be updated in order to satisfy the standards set out in the UK for such an asset.
Specifically, the BoE says it needs access to be able to monitor payment chain information as one of its conditions. The Bank is calling on regulators to use “their powers accordingly” in light of the published principles. The Libra Association and corresponding reserve of various fiat currencies underpinning the network are of prime importance, a more detailed document continues. Network participants, exchanges listing the Libra coin, and Libra-compatible wallets will also fall under scrutiny.
As such, we now have a somewhat detailed response from a country regulator on how it sees Libra fitting into the current regulatory environment and what will satisfy the UK government in terms of allowing the Libra coin to launch operations in the country. The EU Commission has also held discussions on this subject, but has yet to provide a detailed analysis of what it will require for Libra to become operational. Considering the issues noted by the Bank of England, we can anticipate that Libra will need to adhere to national regulations, rather than have a blanket set of requirements to operate across Europe.