LONDON--Facebook's proposed Libra digital coin must show it is "rock solid" before it can be allowed to launch, Bank of England Governor Mark Carney said on Thursday.
The social media giant plans to build a digital currency, raising concerns among global regulators that it could quickly become systemic given Facebook's huge cross-border reach.
Carney, who joins a growing chorus of central bankers unsettled by the project, said many issues needed addressing first, such as anti-money laundering and terrorist financing controls, and managing and safekeeping the assets underpinning Libra. "If you are a systemic payment system, you have to be on all the time. You can't have teething issues, you can't have people losing money out of their wallets," Carney said.
"This is not learning on the job stuff, it's got to be rock solid right from the start or it's not going to start." Carney told a news conference.
Bank of France Governor Francois Villeroy de Galhau said the more regulators look at the project, the more they have serious questions, and perhaps even reservations. "It's out of the question that this means of payment leads to regression on all of the international progress made against money-laundering," he told a commission on digital sovereignty.
France is using its presidency of the G7 group of economic powers to launch a task force to look at how central banks can ensure cryptocurrencies like Libra are regulated from money-laundering to consumer-protection rules. ECB policymaker Benoit Coeure is due to deliver a preliminary report on the matter next week at a meeting of G7 finance ministers in Chantilly north of Paris.
U.S. Federal Reserve Chairman Jerome Powell said on Thursday Libra raised serious concerns and there did not appear to be one agency with oversight. Libra should be subject to the highest level of prudential regulation, he added.
