The US Securities and Exchange Commission (SEC) studies the Libra cryptocurrency to find out if it has similar to an exchange-traded fund (ETF). This writes The Wall Street Journal referring to sources familiar with the situation.
If SEC considers Libra to recognize for a title of an ETF, Facebook will have to get a permission from the authorities to launch Facebook cryptocurrency. This could be a problem for a project that has already been criticized by President Donald Trump and the head of the US Federal Reserve System (FRS).
The Chair of the Federal Reserve Jerome Powell pays special attention to the structure of the project structure. The specialist is concerned about the possibility of money laundering through the Libra. Powell shared his point of view with the U.S. House Committee on Financial Services.
According to WSJ, Facebook representatives have already got a meeting to discuss this issue with SEC, but there were no official comments on this situation. Probably, the issue of regulation of Libra has come into full light on Wednesday, when Facebook CEO David Marcus will address the US Congress.
In an official technical document of the project, Facebook described the mechanics of Libra, which identical to the mechanics of ETF. Dave Nadig, Managing Director of ETF.com, highlighted the following snippet:
Users will not directly interface with the reserve. Rather, to support higher efficiency, there will be authorized resellers who will be the only entities authorized by the association to transact large amounts of fiat and Libra in and out of the reserve. These authorized resellers will integrate with exchanges and other institutions that buy and sell cryptocurrencies to users and will provide these entities with liquidity for users who wish to convert from cash to Libra and back again Dave thinks this is similar to the ETF creation and redemption mechanism. He compares Libra with actively-managed funds that use real assets and manage reserves through “authorized members”.
According to Dave, this is similar to the ETF creation and redemption mechanism. He compares Libra with actively-managed funds that use real assets and manage reserves through “authorized members”.
There is no place for technology giants in the finance industry.
Tomorrow a meeting of the US Senate Banking Committee will take place, at which the bill put forward by the Democratic Majority of the Financial Services Committee of the US Congress is likely to be discussed, reports Reuters. The document received the working title “Keep Big Tech out of Finance Act”.
Politicians propose to limit the ability of technology corporations to acquire the status of financial institutions. The bill prohibits corporations from “creating, maintaining or servicing digital assets intended for mass use as a medium of exchange, accounting units, means of accumulation”.
These bans relate to technology corporations whose annual income exceeds $ 25 billion, and which offer their customers online marketplace services or exchanges. The amount of the fine alleged for violating the ban will be $ 1 million per day.
Source: en.bit.news
