Bankers Advising Fed Board Describe Libra as a Monetary Threat

The Federal Reserve asked some of the nation’s biggest banks about Libra, the digital currency proposed by Facebook Inc., and the answer was simple: They don’t like it.

“Facebook is potentially creating a digital monetary ecosystem outside of sanctioned financial markets -- or a ‘shadow banking’ system,” banks said, according to minutes of this month’s Federal Advisory Council meeting. “As consumers adopt Libra, more deposits could migrate onto the platform, effectively reducing liquidity, and that disintermediation may further expand into loan and investment services.”