The Fed Has No Interest in Regulating Facebook’s Libra
Jerome Powell’s “serious concerns” about privacy, money laundering, consumer protection and financial stability are meaningless.
Facebook’s plan for a digital currency is generating a lot of questions.
Photographer: Bloomberg
Comments by Federal Reserve Chairman Jerome Powell to Congress last week that he has “serious concerns” about Libra, Facebook Inc.’s proposed new cryptocurrency payment system, has been cited as a major reason for the recent drop Bitcoin and other digital currencies. The link is tenuous, since Powell said virtually the same things before. Anyway, it’s what he didn’t say that’s significant.
Powell passed up every opportunity to assert Fed intention to regulate cryptocurrencies—by default suggesting that Congress can either allow patchwork regulation or pass legislation to enhance the responsibilities and powers of the Fed or some other regulator. More specifically, Powell repeatedly refused to say the Fed would do anything about Libra other than be concerned about certain things. Powell gave the definite impression of a mildly interested spectator rather than an active participant with crisp answers and strong views—or even someone making an effort to acquire strong views.