With Libra facing regulatory issues and never-ending criticism, it has found unlikely support in Anthony Pompliano, who is the co-founder and partner at Morgan Creek Digital. Taking to Twitter, Pompliano recently said, “While regulators and lawmakers are focused on Facebook’s Libra, the Wall Street banks are creating something much worse. Regulators and lawmakers around the world had a visceral reaction to Facebook’s Libra because of concerns around sovereignty, KYC/AML, data privacy, monetary policy experience, and many other issues. These are all valid concerns and Facebook should address them.”
0/ While regulators and lawmakers are focused on Facebook's Libra, the Wall Street banks are creating something much worse.
Time for a thread ????
— Pomp ? (@APompliano) September 19, 2019
He further added, “Facebook’s plan is to create a currency that is governed by at least 100 organizations, including geographic and industry diversity. This inclusion of so many organizations decreases the likelihood that any one organization could be nefarious in nature. Wall Street banks do not want to lose their position of power in the financial industry, so they are not going to ignore the crypto industry. In fact, many banks have decided to create their own digital currency.”
Libra has faced a lot of flak from banks and regulators alike. However, we had reported recently that Libra was all set to meet bankers from nearly 26 central banks from across the world. Facebook representatives were supposed to meet officials from nearly 26 central banks, which will include the Bank of England and the Federal Reserve, in Basel.
Coming back to the meeting that took place last week, Benoît Coeuré, of the European Central Bank who chaired the meeting, had explicitly warned that “the bar for the regulatory approval will be extremely high.” This statement was made, after a group of EU finance minister in Helsinki, voiced concerns about how Libra and other digital currencies could ‘destabilize the financial system’ and ‘undermine the sovereignty of governments and central banks.’
Pompliano further said, “Here is the secret: Wall Street banks are not creating digital currencies. They are creating central banks that they exclusively control. The banks are actively building “corporate central banks” in front of our eyes in an attempt to render the Federal Reserve ineffective or unnecessary. Every banker wishes they controlled the Fed. Now they have found a way to do it.
He suggested, “If Wall Street banks are allowed to create corporate central banks, they will create an enormous amount of systematic risk for the global financial system. Regulators should step in immediately and stop this from happening.”
He further stated, Wall Street is building something much worse than Facebook’s Libra. They are building central banks. And it is financial institutions, not FB, that have failed to prevent money laundering, market manipulation, and fraud in the past.”