March 4, 2020 / 5:39 PM / 3 months ago

Next BoE boss Bailey suspicious about Facebook's Libra

FILE PHOTO: A small toy figure is seen on representations of the virtual currency on a displayed European Union flag and the Facebook Libra logo in this illustration picture, October 20, 2019. REUTERS/Dado Ruvic/Illustration

LONDON (Reuters) - The next governor of the Bank of England, Andrew Bailey, said he was suspicious about Facebook’s proposed global digital currency Libra because it was not clear whether it was fully backed by assets.

“I think the initiative has been handled pretty poorly in the sense that it was very vague,” Bailey told lawmakers in Britain’s parliament ahead of his March 16 start as BoE governor.

Bailey said the Financial Conduct Authority regulator that he currently heads and the BoE had asked Libra’s developers whether people owning it would have a direct claim on assets that underpin it.

“You could never get a completely clear answer to that question, consequence of which is I remain pretty suspicious.”

Facebook said in June last year that it planned to launch the digital currency in partnership with other companies but the project has run into trouble with regulators around the world.

Bailey said Facebook’s use of personal data generated by the currency would also raise a lot of issues for regulators.

Reporting by David Milliken and Elizabeth Howcroft; writing by William Schomberg

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