Facebook discussed their plans for Libra with the Federal Reserve

Wed, Jun 19, 2019, 3:50 PM

On Tuesday, Facebook announced its plans to launch a cryptocurrency called Libra within the first half of 2020. Libra, which is looking to change the way payments are being made globally, is being backed by a slew of tech and payment companies such as Visa (V), Mastercard (MA), PayPal (PYPL), Uber (UBER), Lyft (LYFT), eBay (EBAY) and Spotify (SPOT).

“We meet with a broad range of private-sector firms all the time on financial technology, and there’s just a tremendous amount of innovation going on out there,” Powell explained.

While there is a lot of excitement around Libra and Facebook on Wall Street, lawmakers are much more cautious. The U.S. Senate Banking Committee announced on Wednesday that it would be holding a hearing on July 16 to discuss Facebook’s Libra and the privacy concerns surrounding the project.

WASHINGTON, DC - JUNE 19: Federal Reserve Board Chairman Jerome Powell speaks during a news conference after the attending the Board’s two-day meeting, on June 19, 2019 in Washington, DC. Powell said the Fed will keep rates steady and hinted at a possible rate cut later in the year. (Photo by Mark Wilson/Getty Images) — Federal Reserve Board Chairman Jerome Powell speaks during a news conference after the attending the Board’s two-day meeting, on June 19, 2019 in Washington, DC. (Photo by Mark Wilson/Getty Images)

“Digital currencies are in their infancy,” Powell warned. “There are potential benefits here, there are also potential risks. Particularly of a currency that could potentially have large application. So, I would echo what [Bank of England Governor Mark] Carney said, which was that we will wind up having quite high expectations from safety and soundness from a regulatory standpoint, if they do decide to go forward with something.”

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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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