While no one from expected the launch of Facebook‘s Libra project to be easy, they have faced challenges ever since it’s white paper was released a few months ago and continues to push against these hurdles. One of the biggest issues they have faced is getting regulatory approval put in place ahead of the launch as well as getting support from those in the financial industry. It is also significant to note that the number of the founding members of the Libra association has exited the project and some feel that this was due to fear regular of pushback as a result of their association with Facebook‘s token.
Now, according to an October 21, 2019 report, banks might end up having to shut out Facebook as a whole if they go ahead with Libra and this is according to ING CEO Ralph Hamers.
According to Hamers, it is the responsibility of banks to guard the financial industry against criminal activity and put measures in place to prevent them and because the use of the Libra token might encourage illegal activities, banks may be forced to respond.
“We can take measures and exit the client, or not accept the client, so those are discussions you would have to have,” he said.
While cryptocurrency has the advantage of being able to move money seamlessly across borders, this is where the money laundering concern comes in. There is worry that criminals may be able to move the illicit funds without much oversight and that this might cause more criminal activities. Facebook‘s Libra management has stated that it not be launched until they have settled already regulatory issues but according to Hamer, this is a low risk approach.
“We are such a large, regulated institution that you don’t want to risk anything. […] We’ve said we’ll take a look and see how this develops,” he said.
Hamers is not the only person in the banking world who has shown concern towards Libra as recently, JP Morgan’s CEO stated that Facebook Libra is an idea that will never come to fruition and there also been several world leaders that have openly denounced Libra.