10-10-2019 icon

Bank of England Outlines Terms of Engagement for Facebook’s Libra, Others

By Sagetwriter

The Bank of England (BoE) – UK’s Central bank has through its Financial Policy Committee (FPC) published a set of guidelines stating terms that yet-to-be-released Facebook’s Libra stablecoin must adhere to before launching in the United Kingdom.

According to the FPC, “Libra has the potential to become a systematically important payment system…hence it would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight.”

Some of the stated guidelines require payment systems such as the Libra to show financial resilience by ensuring “sufficient information is available to monitor payment activities”; so as to identify and address any emerging risk to the financial stability of these systems.

Page 26 of the publication reads:

The resilience of the proposed Libra system would rely on the stability of not just the core elements of the Libra Association and Libra Reserve but also the associated critical activities conducted by other firms in the Libra ecosystem such as validators, exchanges or wallet providers. This emphasized the need to ensure end-to-end resilience.

– Bank of England

The FPC says these terms of engagement for innovations such as Libra must be adopted before any launch.