As Facebook prepares to launch its Libra cryptocurrency in next June, the social media giant’s ambitious project has drawn increasing attention of regulators. In July, Fed Chair Jerome Powell said “Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” adding, “these are concerns that should be thoroughly and publicly addressed.”
Now, the Financial Action Task Force (FATF), global anti-money laundering watchdog has turned its eye on Libra. The group is concerned about Libra’s potential use in global money laundering, anonymity and creating financial instability:
“We want to make sure that if there are significant risks, they need to be addressed,” said Xiangmin Liu, the president of (FATF)
“The anonymity afforded by virtual assets is being exploited by serious criminals,” Liu said. “These activities are likely to be growing quickly, as law enforcement agencies are only seeing the tip of the iceberg.”
“We have talked about finding suspicious activity as being like finding a needle in a haystack,” he said. “Well, that haystack is getting bigger and bigger, and is moving all the time.”
Libra’s looming launch will bring more scrutiny on how governments and international organizations regulate cryptocurrencies. Governments will naturally favor their own currencies and will try to crush any medium of exchange that undermines their currency control.