India And South Korea Regulators Reacted Negatively To Facebook Initiative
Regulators talk about the Libra token again. Many countries, including Russia and the US, reacted negatively to the initiative, threatening to ban the coin, after the Facebook representatives' official statement about the establishment of the Libra Association and the release of digital currency, based on their own blockchain.
Subhash Chandra Garg, Indian Economic Affairs Secretary, told in the Bloomberg newsletter that the principle of Libra’s work wasn't quite clear for Indian regulators:
Whatever it is, we are talking about private cryptocurrency, but we don’t like this at all
India has a negative attitude to cryptocurrency sphere. Reserve Bank of India (RBI) prohibited private banks and other financial institutions from working with digital coins under the threat of serious sanctions. Moreover, the Indian government is currently working on a bill, according to which any action with cryptocurrency will be considered illegal and punishable.
Simultaneously, South Korea regulators spoke out, too. The Financial Services Commission (FSC) believes, that the transfer of 2.4 billion people (Facebook users) to Libra will lead to capacity to pay reduction of banks, and their reserves will be drained. Moreover, such a plot will lead to a capital outflow from the economy of developing countries. The CoinDesk Korea publisher received this message.
The FSC informed that it would be more complicated for central banks to control international financial flows, the possibilities of monetary policy would be substantially limited, and the profits of South Korean banks would decrease. Also, the South Korean regulator raised the question of money laundering and expressed concerns in the direction of Libra.
Simultaneously with the regulators of India and South Korea, the representative of the European Central Bank (ECB) also spoke out. An Executive Board Member, Benoit Coeure, said that countries shouldn't create any space for Libra and similar projects, because they require serious oversight. We remind you, Coeure will become the head of the G7 research group, which deals with issues of stablecoins, including the initiative Facebook corporation.