The BBC reports that Mark Carney, the Governor of the Bank of England and Chair of the Monetary Policy Committee, Financial Policy Committee and the Prudential Regulation Committee has welcomed Libra to England as long as it is open to being regulated:
“Mark Carney has given a swift and positive reaction to Facebook’s plan, unveiled just last week, and one that will no doubt please Mark Zuckerberg and the rest of the Libra members.
However, while Mr Carney said he has an open mind, he is not offering an open door.
Unlike social media, where regulation is struggling to catch up after its mass adoption by billions of users, Mr Carney promised to make sure regulation to protect against risks including data privacy and money laundering is ready in advance.”
Mercator predicted that cooler heads would ultimately prevail as awareness spread that Facebook will not control the Libra Foundation and that the final structure of the foundation has yet to be solidified. We have recommended Libra take a long hard look at the structure of the Sovrin Foundation which strives for local representatives from around the world and expects the technical committees will be driven by specific use cases and regulatory requirements.
Mr. Carney also announced that the Bank of England will allow non-banks to have bank accounts at BoE:
“Less headline-grabbing than Facebook but arguably more important was the announcement that the Bank of England will allow non-banks to have an account with them.
All the commercial banks we as customers bank with have their own account at the Bank of England where they store their reserves.
Allowing non-banks – for example payment companies like Square and Worldpay – to have their own account could make payments faster, cheaper, more reliable and more available to people outside the traditional banking system.
When I asked Bank officials what the existing High Street banks thought of this – there were some wry smiles – one said “I’m sure they will have a point of view and will want to express it”.
The Bank will also lay some of the groundwork for an open platform for small business financing, Mr Carney said.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
