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Banks to discuss financial destabilisation potential of Libra with Facebook

When Facebook announced its plans to launch a cryptocurrency and digital wallet in the form of Libra and Calibra earlier this year, it proved rather divisive, with many reluctant to let Zuckerberg and co. handle anything financially-related.

As it turns out, so are many financial institutions, with the Financial Times (paywall) reporting that representatives from the Facebook cryptocurrency have been asked to meet with officials from 26 central banks, including the likes of Bank of England, European Central Bank and US Federal Reserve in Switzerland later today.

The topic of those discussions will centre around the “scope and design” of Libra, Central Bank’s Benoît Coeuré explains to the publication.

Facebook does not appear to be too phased with the intense scrutiny, with the firm’s representatives “welcoming” the chance to speak with other major entities in the financial market. The company added that it announced Libra and Calibra earlier this year specifically so that there was a long lead up time, allowing the firm to have discussions with those in the industry who had questions about the cryptocurrency.

As Engadget frames it, things may not going according to plan for Facebook at these talks, with several EU ministers particularly concerned with a potential destabilising effect that the cryptocurrency could have for traditional government banks.

Whether that said destabilisation will come to fruition remains to be seen, but Facebook has noted that a big focus for Libra and Calibra will be developing markets, especially those with a large unbanked community. Libra has also been touted as a “stablecoin” according to its designers, which would be far less volitile than the likes of Bitcoin and Ethereum.

Concerns have also been raised about whether criminal organisations will look to leverage Libra and Calibra to nefarious ends, but as the platform and cryptocurency are yet to enter the market, those fears may be premature.

Either way it looks like regulators will be looking to make things as difficult for Facebook and its ambitions for Libra.

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