September 17, 2019 / 10:35 AM / a year ago

ECB's Villeroy tells Facebook that Libra faces tough scrutiny

LONDON, Sept 17 (Reuters) - European Central Bank board member Francois Villeroy de Galhau said on Tuesday that "stablecoins" like Facebook’s Libra highlight gaps in rules and the media giant's project faced a tough regulatory approach.

Facebook's planned Libra is the most well-known of the stablecoins, cryptocurrencies backed by assets such as traditional money deposits, short-term government securities or gold.

“'Stable coins' are quite different from speculative assets like Bitcoins. However, regulators will have to keep a very close eye at the global level, and believe me, we will do it," Villeroy said.

Facebook has said it will apply for a licence as a payments services operator in Switzerland, but this may not be comprehensive enough to satisfy regulators.

"If issuers of stable coins also want to offer banking services such as deposits, financial investments and loans, then they will have to obtain a banking license in all countries where they operate. Otherwise these activities would be illegal," Villeroy said. (Reporting by Huw Jones and Marc Jones)

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