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British government won’t try to stop Facebook’s new Libra digital coin, says UK finance minister

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Regulators, not lawmakers, should decide whether Facebook needs a banking license to launch the new digital currency Libra, according to Philip Hammond, Britain’s outgoing finance minister.

In an interview with CNBC’s “Squawk Box,” Hammond said that lawmakers should not decide to require the social media giant Facebook to acquire a bank license as it is “an issue for regulators to determine, not for politicians to determine.” Hammond said that Libra could be “a very positive thing” once it is properly regulated, and added:

“We’re not going to turn our back to it or try to stop it. We’re going to engage with it and try to work with others to ensure that it is effectively regulated.”

However, Hammond warned that, without proper scrutiny, Facebook’s proposal could introduce “great risk” into the financial system as it could quickly be adopted as a tool for money launderers and sponsors of terrorism. He added that he viewed Libra as being different from bitcoin, the world’s most popular cryptocurrency, because the two coins had contrasting ownership structures.

Hammonds delivered his comment ahead of a hearing on the Libra cryptocurrency project with the Banking Committee of the United States Senate, which will be held tomorrow, July 16. Following the release of the project’s whitepaper, U.S. regulators expressed their concern about the project’s possible effects on financial stability.

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