FRANKFURT, Germany (AP) – An international financial monitor warned world leaders Tuesday that wider use by retail shoppers of cryptocurrencies like Libra, unveiled last week by Facebook, would need “close scrutiny” by regulators.
The chief of the Financial Stability Board made the statement in a letter to the heads of state and government who will gather at the Group of 20 summit on June 28-29 in Osaka, Japan.
Finance officials are debating how to regulate cryptocurrencies after Facebook unveiled Libra, a digital form of cash linked to existing currencies. Cryptocurrency is a form of digital money that uses encryption technology to make it secure. Cryptocurrencies exist not as physical bills or coins but rather as lines of digitally signed computer code.
FSB chair Randal K. Quarles, whose letter doesn’t mention Libra by name, said technological innovation could make the financial sector more efficient and inclusive and that cryptocurrencies do not at the moment pose a risk to global financial stability.
He warned, however, that “a wider use of new types of crypto-assets for retail payment purposes would warrant close scrutiny by authorities to ensure that that they are subject to high standards of regulation.”