does not embody a claim of its holders against the libra association. if libra were to be treated as a transferable security or a different type of financial instrument, both the libra association and any other entities engaged in providing investment services through libra coins would fall within the remit of the markets in financial instruments directive ( mifid ii ). alternatively, if libra were to qualify as a virtual currency then, under the fourth anti - money laundering directive, both calibra and its authorised resellers would become subject to the directive ’ s anti - money laundering and counter - terrorism financing obligations, and to its registration requirement. given the different regulatory implications of libra ’ s legal 2 / 4 bis central bankers'speeches characterisation, regulatory intervention is essential, to either confirm libra ’ s classification under one of the existing legal and regulatory frameworks, or to create a dedicated regime adjusted to its specificities. a second challenge is to ensure that the relevant eu and member state regulatory and supervisory authorities can assert jurisdiction over libra and its network. but how can this be done when the entities behind libra are located outside the eu? one way would be to require national custody of a share of the libra reserve funds equivalent to the amount of libra in circulation in any given eu member state. but there may be other ways to ensure effective public control over libra and its network, and these are worth exploring. ensuring that payment systems are safe and accessible and exercising control over the financial market infrastructures that underpin our economies will remain public good objectives. and the conditions under which collateral or settlement finality are accepted will remain prerogatives of the regulatory or legislative authorities. the third challenge is the need for cross - border cooperation and coordination. because libra will be used across borders, it is a matter of international interest. its global nature would also call for a global regulatory and supervisory response to avoid regulatory arbitrage, ensure consistency of outcomes and guarantee the efficiency of public policy responses to libra. there are welcome signs that the global community is already working together to mitigate libra ’ s risks. both the g7 and the committee on payments and market infrastructures have evaluated libra, with an emphasis on its potential use in money laundering and terrorist financing. further work is expected by the g20, the financial stability board and other fora with a stake in the stability of the global monetary and financial system. finally, i would like

##ly preserve public trust in them. so private currencies have little or no prospect of establishing themselves as viable alternatives to centrally issued money that is accepted as legal tender. the stance of central banks towards modern forms of money is bound to evolve with time, and central bankers have embraced technological developments in the field of money and will continue to explore helpful new innovations. but the rise of cryptocurrencies and other forms of privately issued instruments that can only fulfil some, but not all, of the functions of money is unlikely to fundamentally upset the two truths i just described. if anything, it will serve as a useful reminder of central banks ’ pivotal role as responsible stewards of public trust in money, and stress the need for vigilance towards phenomena capable of undermining public trust in the financial system. i sincerely hope that the people of europe will not be tempted to leave behind the safety and soundness of established payment solutions and channels in favour of the beguiling but treacherous promises of facebook ’ s siren call. 1 see mersch, y. ( 2018 ), “ virtual or virtueless? the evolution of money in the digital age ”, lecture at the official monetary and financial institutions forum, london, 8 february. 4 / 4 bis central bankers'speeches