Financial regulators must act fast to prepare for the push by US technology giants like Facebook into the financial system, according to European Central Bank executive board member Benoit Coeure.
โItโs out of the question to allow them to develop in a regulatory void for their financial service activities, because itโs just too dangerous,โ Coeure said on Sunday in Aix-en-Provence in southern France. โWe have to move more quickly than weโve been able to do up until now.โ
Facebookโs plan for a digital currency called libra has policymakers scrambling. The UKโs three main financial regulators are working together on how best to respond. Governor Mark Carney has said the Bank of England approaches it โwith an open mind but not an open doorโ.
The plan has also drawn fire in Washington, with more than 30 groups influential with Democrats demanding a halt to the project to deal with the โprofound questionsโ it raises. David Marcus, the executive leading Facebookโs libra and blockchain efforts, will testify before the US congress this month on the initiative.
Coeure said that the development of digital currencies is exposing deficiencies in existing regulation and the failure of the banking system to adopt new technology.
โAll these projects are a rather useful wake-up call for regulators and public authorities, as they encourage us to raise a number of questions and might make us improve the way we do things,โ Coeure said.ย — Reported by Angeline Benoit and James Regan, with assistance from Tara Patel, (c) 2019 Bloomberg LP





