UK regulator scrutinising Facebook’s plan for digital currency

The UK’s financial regulator has already held discussions with Facebook over its planned digital currency and will seek many more, warning that the technology giant “will not walk through authorisation” likely needed from the watchdog to operate.

Andrew Bailey, the head of the UK’s Financial Conduct Authority, confirmed that the FCA is working with the Treasury and the Bank of England to scrutinise Facebook’s plans to upend the delivery of financial services through its global coin, dubbed Libra.

“We will have to engage domestically and internationally, with Facebook and this other [Libra] organisation. They are not going to walk through authorisation without that,” Mr Bailey told the Treasury select committee on Tuesday.

“We have already engaged with Facebook and there will be many more engagements. We are waiting to see how the responsibility will divide between Facebook and the other organisation,” he said.

The Financial Times last week reported the discussions between the Treasury, FCA and BoE over Libra.

Under Facebook’s plans, formally unveiled last week, Libra will be underpinned by a basket of currencies and assets managed by a Swiss trust, the Libra Association.

The tech giant’s plans swiftly drew a response from policymakers in the West, with the G7 setting up a high-level forum to examine the risks of such currencies to the financial system. Mark Carney, the governor of the Bank of England, said the BoE greeted the plans with “an open mind” but “not an open door”.