Regulatory Series on Cryptocurrencies: Bank of England Establishes British Regulations For Facebook’s Libra

Facebook’s crypto-project initiative ‘Libra’ has been confronting various hindrances before an actual take-off, talk of the town across the globe and reinstating the project is the most buzzing topic even within the U.S. region. The recent trend is that, Libra is perceived to be risky. A senior U.S. Treasury executive gave some guidelines as to how the Libra system has to abide by the compliance and the highest standards for ensuring safeguard from the money laundering and terrorism financing. 

Elsewhere, the French finance minister Bruno Le Maire attacked Facebook’s Libra and said that the country will block the development of the digital currency in Europe.

Foreseeing that the Libra could be potential risk and threat for the country’s sovereignty, the precautious actions were taken as the ministry is concerned about Libra’s impact on the financial stability, as per Reuters report.

But for now, the Bank of England is drafting British regulations for the Facebook’s crypto project ‘Libra’ which seems to be stringent. The regulatory framework is systemically significant and Libra will have to confront these regulations meticulously once it is set-out in the United Kingdom, says Bank of England. 

The British central bank is due to unveil the cryptocurrency project on notice and mentioned that it would have to undergo tight monetary inspections in the country. 

They proclaimed that the upcoming cryptocurrency most likely to be ‘systemically important’ to the financial network. Hence, there exists the stringent regulation in place. 

The ‘Financial Policy Committee’ (FPC) of the central bank also stated that British authorities will be entrusted for a an empirical analysis of the Libra’s functionalities, and its relevance and impact on the financial network and check whether current regulations will apply to Libra or not.