Facebook’s proposed Libra cryptocurrency will face tough scrutiny from both Swiss officials and their American counterparts.
Geneva-based Libra was warned this week by a senior US Treasury official that the Facebook-led (FB. cryptocurrency project must meet the highest standards for combating money laundering and terrorism financing if it is to get off the ground.
US Under Secretary of Terrorism and Financial Intelligence Sigal Mandelker told reporters in Geneva that any cryptocurrency project, including Libra, operating in all or substantial parts of the United States will clearly have to satisfy US regulatory standards.
“Whether it’s bitcoin, Ethereum, Libra, our message is the same to all of these companies: anti-money laundering and combating the financing of terrorism has to be built into your design from the get-go,” Mandelker was quoted by Reuters as saying.
She was speaking after meeting Swiss government officials and representatives from the Bank for International Settlements to discuss cryptocurrencies.
She said that much of the industry has paid far too little attention to ensuring that the networks they are building do not enable terrorists and other bad actors to hide and move money.
The planned Libra project is to be launched by a Swiss-based association.
Facebook had announced Libra earlier this year, saying it plans to provide the currency as a way to make payments independent of nationally issued money.
The company has said it plans to launch Libra early next year.
Earlier this month the European Central Bank warned of the “beguiling but treacherous promises” of Facebook’s proposed Libra cryptocurrency, saying the asset could compromise the ECB’s ability to set monetary policy.
Regulators and lawmakers have also expressed concerns over Libra since it was announced, with the issues raised including the currency’s potential for violation of money laundering and data protection rules.
The European Commission is also carrying out an early-stage antitrust probe into how Libra will be run and how its payment system will work.
The chairman of the US Federal Reserve, Jerome Powell, has previously that Facebook’s Libra cryptocurrency project, “cannot go forward” until serious concerns are addressed.