22 Oct 2019
Banks could suspend their services for Facebook should the social media company launch its planned digital currency without addressing regulatory concerns, the chief executive of ING told the Financial Times.
If banks determine that Facebook has opened itself up to facilitating the movement of illicit funds with the launch of Libra, anti-money laundering (AML) compliance concerns could prompt the institutions to terminate their relationship with, or reject services for, the company, ING CEO Ralph Hamers said in a report published Tuesday.
“We are such a large, regulated institution that you don’t want to risk anything,” Hamers told the newspaper of ING’s decision not to involve itself in Facebook’s proposed cryptocurrency. “We’ve said we’ll take a look and see how this develops.”
To date, banks have largely opted not to engage with the controversial project while financial supervisors across the globe have questioned how Facebook would effectively shield Libra from criminal exploitation and privacy abuses, the Financial Times said.
Such concerns led five of Libra’s 28 backers to exit the project earlier this month, including Visa, Mastercard and Stripe. Last week, JPMorgan Chase’s chief executive Jamie Dimon described Libra as a “neat idea that will never happen,” according to media reports.
A Facebook spokesperson told the Financial Times that the social media giant would not launch Libra until it has “fully addressed regulators’ concerns and received appropriate approvals.”
Facebook CEO Mark Zuckerberg is expected to discuss project’s compliance issues in a congressional hearing next week.
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