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Lionel Laurent

When Facebook’s Banker Is Governor Mark Carney

The Bank of England is ready to open the doors of the financial system a little more to Big Tech. Incumbent banks should worry.

Hi guys. Let’s talk. 

Hi guys. Let’s talk. 

Photographer: Luke MacGregor/Bloomberg

Central banks and financial regulators have been on high alert since the launch of Facebook Inc.’s proposed cryptocurrency, Libra. It’s still at the conceptual stage, but the prospect of a tech giant with 2.6 billion users shuffling digital money around and backing it with piles of dollars, euros and pounds is a potential heart attack in the making for those trying to keep the financial system stable, governable and predictable. That means setting the rules now, before Libra’s born.

One idea as to how officials might keep CEO Mark Zuckerberg’s dreams grounded in reality is to get under the hood of what goes into the digital currency in the first place. Given Libra wants to back every digital cent with a mix of real-world reserve currencies, that might be the best place to start. Bank of England boss Mark Carney hinted at this in his Mansion House speech on Thursday, proposing that tech firms and other non-banks be allowed to hold funds directly at the central bank.