Facebook hopeful about Libra's launch in Korea

FSS chief Yoon vows to change regulatory paradigm

By Park Jae-hyuk

Facebook has shown it is in close communication with the financial authorities here, hinting that its Libra digital currency and Calibra digital wallet will likely be available in Korea.

Facebook Vice President Tomer Barel, who also serves as the chief operating officer (COO) of Calibra, Facebook’s newly established cryptocurrency subsidiary, said Tuesday his company has continued to talk with the Financial Supervisory Service (FSS) regarding its digital currency which will be launched in 2020.

He made the remarks at the Challenges to Future Finance international conference that the financial watchdog jointly hosted with Ewha Womans University, in order for financial industry officials here to share their insights into the future of finance with executives from global ICT companies, such as Amazon Web Services, Facebook and Microsoft.

The FSS invited the Calibra COO to give a presentation introducing Libra and Calibra.

“Another very important difference [between us and other cryptocurrency companies] is the way we view our interaction with regulatory bodies; like the FSS that invited me today, as well as others; and with policymakers,” Barel said.

“We are in constant dialogue with regulating bodies all over the world, to get constant feedback and questions. It’s uncommon for parties to share details and plans a long time ahead of the actual launch.”

FSS Governor Yoon Suk-heun also expressed a favorable opinion on deregulation, citing Andrew Bailey, the CEO of the Financial Conduct Authority in the United Kingdom, who said regulations should “enable change to happen consistent with public policy objectives.”

“In order to effectively cope with upcoming financial innovations, authorities too are in the process of changing their regulatory and supervisory paradigm,” Yoon said in his opening speech.

“In Korea too, we at the Financial Supervisory Service, along with the Financial Services Commission (FSC), have started to encourage financial innovation by implementing a regulatory sandbox. Furthermore, we are trying to create a new and innovative financial ecosystem.”

This seems contradictory to what the FSC said in a July 5 report regarding Libra.

The FSC is the government’s top financial regulator that oversees and directs the FSS.

In the report, the FSC mentioned decreases in banks’ solvency, bank runs, limiting of central banks’ ability and money laundering as possible outcomes of Libra’s launch.

Although the FSC said at that time that the report was not its official opinion on Libra, financial industry officials have regarded it as the regulator’s way of expressing its concerns over Facebook’s cryptocurrency.

Facebook, however, has continued to show interest in the Korean market, despite such concerns.

Facebook Korea Vice President Park Dae-sung told reporters Aug. 27 that his company has paid attention to the Korean market, because of its well-established infrastructure for the service.

He added nothing has been specific about Libra’s launch in Korea, but Facebook reportedly applied for trademark registration of Libra on July 12 to the Korean Intellectual Property Office.