Banks could leave Facebook if Libra does not meet all the anti-money laundering requirements of the financial regulators.
This is what is reported today by the Financial Times, echoing the words of ING CEO Ralph Hamers.
“Then we can take measures and exit the client, or not accept the client, so those are discussions you would have to have. We are such a large, regulated institution that you don’t want to risk anything. We’ve said we’ll take a look and see how this develops”.
Moreover, he answered positively to the question of whether the launch of Libra could make it more difficult for them to continue financing Facebook. Banks like ING also play the role of “gatekeepers” within the current financial system, which makes it very difficult to have a customer company that might be suspected of dealing with money laundering.
It is no coincidence that a Facebook spokesperson responded to these concerns by saying that from the outset they chose to take all the time necessary to ensure that things were done properly, and to have a dialogue with the institutions to ensure that Libra’s financial infrastructure complied with all the regulations. He also confirmed that the stablecoin will not be put on the market by Facebook until the Libra Association has addressed all the concerns of the regulators and received the necessary approvals.
The possible use of the stablecoin for money laundering is one of the major concerns of the regulators themselves regarding the use of Libra and in particular the possibility of being used by illegal activities to move money around the world without any control.
The Financial Times also adds that it is not only ING that is concerned, but there are other financial institutions that have raised the same concerns.
This scenario, however, from a certain point of view suggests that the real risks arising from a concrete launch of Libra could be fewer than the theoretical ones because, in light of what Hamers revealed, it is very unlikely that Facebook can really launch this stablecoin on the market without having solved these issues.
In theory, it would be possible, but it seems very unlikely, also because Facebook seems really aware of the huge risks it would face. Instead, the scenario in which they abandon the launch of the stablecoin on the market seems more plausible, provided that they are unable to solve the problems related to anti-money laundering.