Facebook has faced a grilling from 26 central banks over the scope and design of its proposed cryptocurrency Libra, amid mounting concern over the threat posed to financial stability and monetary sovereignty.
Facebook executives representing Libra were questioned Monday by the Bank for International Settlements' powerful Committee on Payments and Market Infrastructure, a forum comprising central bank chiefs from the world's biggest economies.
Facebook shared the floor with bank-backed stablecoin project Fnality, and JPMorgan's Interbank Information Network, which is creating a JPM Coin for use in interbank transactions.
The meeting was chaired by European Central Bank executive board member Benoit Coeure. The group will produce a final report on its work by mid-October.
"As a new technology, stablecoins are largely untested, especially on the scale required to run a global payment system," says Coeure. "They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high."
Facebook is being assailed from all sides over its plans, with finance ministers in both France and Germany just last week threatening to ban its use.
In a joint statement, France’s Bruno Le Maire and Germany’s Olaf Scholz warned of the dangers to consumer interests and financial stability, stating: “France and Germany consider that the Libra project, as set out in Facebook’s blueprint, fails to convince that those risks will be properly addressed."
Le Maire has been even more forthright, saying on Thursday: “I want to be absolutely clear: In these conditions, we cannot authorise the development of Libra on European soil.”
In response, Facebook's David Marcus, who is chaperoning the project at the social media giant, took to Twitter with a lengthy thread aimed at debunking the notion that Libra presented a threat national sovereignty: