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Facebook discussed their plans for Libra with the Federal Reserve

Heidi Chung

Tech giant Facebook (FB) consulted the Federal Reserve ahead of the launch of its cryptocurrency Libra, according to Fed Chairman Jerome Powell.

“Facebook has made quite broad rounds around the world, with regulators, supervisors, and lots of people to discuss their plans. That certainly includes us, and it’s something that we’re looking at,” Powell said Wednesday at a press conference.

On Tuesday, Facebook announced its plans to launch a cryptocurrency called Libra within the first half of 2020. Libra, which is looking to change the way payments are being made globally, is being backed by a slew of tech and payment companies such as Visa (V), Mastercard (MA), PayPal (PYPL), Uber (UBER), Lyft (LYFT), eBay (EBAY) and Spotify (SPOT).

[Read more: Facebook's cryptocurrency project is called Calibra]

“We meet with a broad range of private-sector firms all the time on financial technology, and there’s just a tremendous amount of innovation going on out there,” Powell explained.

While there is a lot of excitement around Libra and Facebook on Wall Street, lawmakers are much more cautious. The U.S. Senate Banking Committee announced on Wednesday that it would be holding a hearing on July 16 to discuss Facebook’s Libra and the privacy concerns surrounding the project.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after the attending the Board’s two-day meeting, on June 19, 2019 in Washington, DC. (Photo by Mark Wilson/Getty Images)

“Digital currencies are in their infancy,” Powell warned. “There are potential benefits here, there are also potential risks. Particularly of a currency that could potentially have large application. So, I would echo what [Bank of England Governor Mark] Carney said, which was that we will wind up having quite high expectations from safety and soundness from a regulatory standpoint, if they do decide to go forward with something.”

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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