Ever since the potential launch of Facebook’s Libra was announced by the social media behemoth, the company’s cryptocurrency project has lurched from one problem to the next. Regulators from different parts of the world had voiced their concerns about the Libra cryptocurrency, and even the President of the United States slammed Facebook in one of his famous tweets.
New Trouble?
In a new development, it has now emerged that if Facebook (NASDAQ:FB) does not take care of the regulatory issues with regards to Libra, then banks might refuse to provide services to the company.
There have been fears from central banks that Libra might try to become a replacement of fiat currency, and today, the CEO of a major bank spoke about the possibility of not providing banking services to Mark Zuckerberg’s company. Ralph Hamers, the Chief Executive Officer of ING, has stated that banks might consider that step if Facebook does not comply with all the regulatory issues. He stated that if the company does not comply with regulatory frameworks, then there is the risk of criminal activity. In such a situation, banks will probably have no other option but to pull the plug.
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Hamers said, “Then we can take measures and exit the client, or not accept the client, so those are discussions you would have to have.” As everyone knows, banks are bound by stringent regulatory frameworks, and it is highly unlikely that they are going to be able to do business with a company that enters the financial system without the proper checks.
It is an understandable degree of caution from ING, and it remains to be seen if more banks come up with such statements with regards to Libra. However, it should be reiterated that Facebook had earlier stated that it is going to launch the crypto token only after meeting all the regulatory requirements.
Featured image: DepositPhotos © BiancoBlue
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