Facebook’s crypto association holds talks with major bankshttps://indianexpress.com/article/technology/tech-news-technology/facebooks-crypto-association-holds-talks-with-major-banks-5793675/

Facebook’s crypto association holds talks with major banks

Facebook said this week it hopes Libra will provide a low-cost way of sending money to the 1.7 billion people around the world without easy access to traditional financial services.

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Citigroup’s Corbat said financial-technology firms would be wise to keep regulators’ concerns in mind as they develop new products and services. (image: Bloomberg)

The biggest US banks have a chance to get in on the new cryptocurrency spearheaded by Facebook Inc. The association behind the Libra coin is in talks with the banks to participate in its governing body, according to a person familiar with the matter who asked not to be identified discussing private negotiations. The person didn’t specify which banks were in talks.

“We’d take a look at it,” Citigroup Inc Chief Executive Officer Michael Corbat said Thursday at the Fortune Brainstorm Finance conference in response to a question about whether his bank would join the association if asked. Facebook “did not approach us” ahead of the launch, he said.

Facebook said this week it hopes Libra will provide a low-cost way of sending money to the 1.7 billion people around the world without easy access to traditional financial services. The firm recruited more than two dozen other companies, including Visa Inc and PayPal Holdings Inc, to be founding members of the association governing the currency. Dante Disparte, the head of policy and communication for the Libra Association, said the group is in touch with banks both in the US and abroad that he declined to identify. Libra wants big lenders involved as founding members and as banking partners to help hold and manage its currency reserve, he said.

“Banks have an important role to play,” Disparte said in an email. “As such, we very much welcome their participation.”

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Also Read: I tried using Facebook’s Libra blockchain. It didn’t work.

Libra continued to draw criticism from US lawmakers on Thursday, with Representative Maxine Waters, chair of the House Financial Services Committee, telling CNBC that Congress plans to “move aggressively and very quickly to deal with” the currency. The California Democrat reiterated her call for Facebook to pause development until lawmakers can look into the project.

“It’s very important for them to stop right now what they’re doing so that we can get a handle on this” Waters said in the CNBC interview. “This is like starting a bank without having to go through any steps to do it.”

Also Read: Facebook Libra: Why regulators, governments are not impressed about the cryptocurrency

Citigroup’s Corbat said financial-technology firms would be wise to keep regulators’ concerns in mind as they develop new products and services. While Corbat called himself a “true believer” in cryptocurrency and blockchain, he stopped short of saying his bank would soon offer clients more access to the digital monies. The challenge with “certain aspects of Bitcoin or cryptocurrency is the opaqueness around the sources of the money,” Corbat said. Anti-money-laundering laws prohibit Citigroup from sending or receiving digital currencies, he said.

At the same conference, Western Union Co CEO Hikmet Ersek said it will be difficult for Facebook and its partners to develop trust among consumers and gain widespread adoption for payments, calling the effort a “long shot.”