Wednesday, October 28, 2020

Facebook’s Libra must obey anti-money laundering rules: French central banker

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Facebook’s planned global ‘Libra’ cryptocurrency must respect anti-money laundering regulations and it must seek banking licenses if it offers banking services, France’s central bank chief said in a magazine interview.

Facebook Inc announced plans last week to introduce a new global cryptocurrency called Libra as part of an effort to expand into digital payments.

Bank of France Governor Francois Villeroy de Galhau said that while there was room to improve cross-border money transfers, Libra had to follow anti-money laundering rules.

“The risks are increased by the anonymity that Libra users would have,” Villeroy said in an interview with French weekly magazine L’Obs, adding that Libra would have to ensure transactions and users’ data were fully secure.

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“If the project seeks to go beyond payments to offering banking services like deposits, it will then have to be regulated like a bank with a banking license in all the countries it operates. Otherwise, it would be illegal,” he said.

France is using its year-long presidency of the Group of Seven nations (G7) to set up a task-force to tackle such concerns at an international level.

It has been charged with studying how cryptocurrencies like Libra are governed by regulations ranging from money laundering laws to consumer-protection rules.

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