(Bloomberg) -- Bank of England Governor Mark Carney has defended the concept behind new crypto currencies like the Facebook Inc (NASDAQ:FB).-led Libra.
Asked by lawmakers in London Tuesday why firms like the social media company should be getting involved in such projects given the associated risks, Carney pointed to the shortcomings of existing payments systems. He said the high costs of moving money across borders are penalizing, especially small, businesses, and that debit payments can cost firms as much as 200 basis points per transaction and take too long.
“That’s not good enough in this day and age. Those payments should be instantaneous, it should be the same as us exchanging a banknote online. It should be virtually costless and it should be 100% resilient. There are different ways to solve that but the challenge -- this is for the U.K. -- is to bring online payments and other payments up to the standard that is found in a number of major emerging economies and a few advanced economies.”
However, he added a warning that any developments will be heavily scrutinized by authorities. Carney will travel to Washington later this week for international meetings and events on the future of finance.
“In terms of how this will proceed or not going forward, this will not be like social media. This will not be a case where something gets up and starts running and the system tries to work out after the fact how it’s regulated. It’s either going to be regulated properly, overseen properly, or it’s not going to happen.”