The US Securities and Exchange Commission (SEC) is studying the structure of the Libra digital currency project and intends to determine whether it has the characteristics of a stock exchange traded fund (ETF). It is reported by The Wall Street Journal, citing sources familiar with the situation.
In the event that the Commission recognizes Libra as an ETF, Facebook will be forced to receive permission from the agency to launch the project.
According to the publication, representatives of Facebook had already contacted the Commission, as well as a number of other organizations, including the US Federal Reserve System (FRS). It is expected that Libra regulation issue will be raised on Tuesday, July 16, when the head of Facebook blokcheyn division David Marcus will speak before the US Senate.
“It seems that they [Facebook] have not fully thought through all the mechanics or regulatory difficulties associated with the influx of money from users. At least, there are questions like the ones that the SEC is trying to understand now, ”said Iona Crane, a former senior official at the US Treasury, currently advising fintech companies on regulatory issues.
Representatives of Facebook and SEC have not yet commented on the situation.
Nevertheless, ETF.com Managing Director Dave Nadig believes that the principles of the digital currency described in white paper Libra really make it look like an ETF. In particular, he recalls that Facebook plans to use a basket of real assets, including bank deposits and government securities. In addition, the social network intends to attract “authorized resellers” to ensure the stability of the course Libra.
Earlier this week, Fed Chairman Jerome Powell said that the Libra project could not be launched until the Facebook network provides answers to “all the questions that are troubling”. Among such issues, he listed user privacy, possible money laundering, consumer protection and overall financial stability.
maybe you missed: