US Treasury Agrees That Libra Has To Be Observed

The US treasury department agreed that the Libra crypto project has to be observed since the need for an investigation into Facebook’s forthcoming stablecoin is growing according to the letter from the Representative Emanuel Cleaver as we are about to find out more in the Libra coin news today.

According to a press release published by the Congressman Cleaver, the US Treasury provided an affirmative response to Cleaver’s appeal to examine Libra and the wallet Calibra for potential systemic risk. Cleaver sent the letter to the social media giant- Facebook, Calibra, the Office of Financial Research and the Financial Stability Oversight Council. In September, Facebook stated that it would postpone the launch of the cryptocurrency until the regulators approve it.

The Department of Treasury responded to Cleaver’s request and noted that Libra has to be compliant with Anti-Money Laundering/Combating the Financing of Terrorism guidelines as well as Bank secrecy act requirements. The US Treasury questioned the ability of both US and foreign regulators to oversee Libra and require corrective action because the issues have to be addressed before Libra is launched.

The agency added that it will monitor Libra and the cryptocurrency market in order to address the possible regulatory gaps. Cleaver stated:

 “It is absolutely critical that any effort to launch a cryptocurrency be met with the most stringent of examinations to ensure such an endeavor does not pose a systemic risk to the global economy. I appreciate Facebook’s willingness to work with federal regulators as the company seeks to launch Libra, which has the potential to update—or upend—our financial system. As Facebook works down this regulatory road, it is imperative that we affirm that terror financing and money laundering is not advanced through Libra, and, according to FSOC, significant concerns remain.”

Cleaver received the letter one day before the Facebook CEO Mark Zuckerberg testified before the House Financial Services Committee regarding Libra. At the hearing, the representative Tim Mahoney asked Zuckerberg to commit to keeping libra from all of the wallets that maintain lower standards of Know Your Customer and AML Controls than those Facebook is promising for its wallets. It’s important that the US Treasury agrees to monitor Libra so we will see what the other agencies will think.