Facebook Talked to the Fed About Libra, Chairman Powell Says

Jerome Powell, chairman of the U.S. Federal Reserve, said Wednesday that social media giant Facebook met with the central bank in the run-up to the reveal of its Libra cryptocurrency.

Speaking during a press conference that followed a two-day Fed policy meeting, Powell was asked if he or the Fed had any concerns about Libra affecting the central bank’s ability to conduct monetary policy, as well as if Facebook met with Fed officials.

“You know Facebook, I believe, has made quite broad rounds around the world with regulators, supervisors and lots of people to discuss their plans and that certainly includes us,” he said.

As for potential effects on monetary policymaking, Powell said that “we’re a long way from that,” going on to note that “digital currencies are in their infancy.”

“So essentially…not too concerned about the central banks no longer being able to carry out monetary policy because of cryptocurrencies or digital currencies,” he continued.

“It’s something we’re looking at,” said Powell, going on to state:

“You know, there are potential benefits here, there are also potential risks, particularly of a currency that could, you know, have large application. So I would echo what Governor Carney said which is that we will wind up having quite high expectations from a safety and soundness and regulatory standpoint if they do decide to go forward with something.”

On Tuesday, Bank of England governor Mark Carney said that Libra could be subject to the “highest standards” in global regulation and that the U.K. central bank would be looking “very closely” at the initiative.

Powell also noted that “we don’t have plenary authority over cryptocurrencies” when asked if the Fed would directly oversee Libra, but he highlighted the Fed’s role in international regulatory groups, suggesting that the U.S. central bank would likely have input in any regulations that take shape in the wake of Facebook’s Libra debut.

Image via Wikicommons