Libra facebook financial times
The European Union has tabled a series of urgent questions to Facebook about its Libra coin project as corporate backers appear to be abandoning the initiative. Regulators are concerned that cryptocurrencies, digital currencies and tokens pose serious risks to financial stability, fiscal probity, and anti-money-laundering AML initiatives by enabling cross-border payments that may be impossible to track. Meanwhile, US regulators are also questioning the social network about its plans for Libra in a climate of low trust in the company in the wake of the Cambridge Analytica affair and other scandals. At the time of writing, this leaves just one payments company, PayU, onboard — and perhaps now in a strong negotiating position. Facebook claims to have 2.
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- Libra rebrands as Diem in effort to distance itself from Facebook
- Libra – A Differentiated View on Facebook’s Virtual Currency Project
- Facebook's Libra cryptocurrency to launch in January 2021
- Facebook's long-awaited libra currency to reportedly launch in a limited form early next year
- The winners and losers in Libra’s murky future
- Facebook cryptocurrency Libra to launch as early as January but scaled back: Report
Libra rebrands as Diem in effort to distance itself from Facebook
After months of rumours, Facebook finally unveiled its digital currency plans - and they did not disappoint. The social media giant's plans are far-reaching and have already attracted some well-known partners to back it. Is Libra really the best of the libertarian cryptocurrency and traditional corporate worlds combined?
When the social media giant with close to 2. Facebook's Libra, clearly has the potential to quickly achieve vast scale, setting it apart from any other cryptocurrency and virtual or gaming currency around.
Facebook is well aware that in order for Libra to be successful, it needs to open it up, which is why it is seeking the support of other corporate backers and has announced that Libra will launch as an independent entity in Indeed, technology hasn't yet made all this possible, but the status quo makes it very convenient for Facebook to launch Libra in a comfortable centralised way, whilst grabbing the world's attention with the launch of a cryptocurrency on blockchain.
The value for Facebook is not in the Libra currency itself, the transaction data is the real treasure trove. From a technical perspective, the current centralised governance means using a blockchain architecture is unnecessary to add to the confusion, Libra claims to be a blockchain without blocks. But if indeed, Libra is to make good on its promise to start moving towards decentralised governance in , then it makes sense to start on a blockchain right away.
The plan is for the Libra network to operate independently from Switzerland, but users will need a Libra 'wallet' to interact with it, and that wallet will be domestically regulated. Facebook is building the Calibra wallet, and contrary to Libra itself, Calibra will be wholly owned by Facebook. This makes sense: the value for Facebook is not in the Libra currency itself; the transaction data are the real treasure trove. This data will be generated by the wallet app and Facebook claims it won't mingle transaction data with its other data without user consent.
The Calibra app will probably make efforts to get this consent by offering superior functionality. Libra takes us right back to the discussion that has been haunting cryptocurrency for years, is it a security or something else?
The biggest question right now is, how will regulators react? An e-money license which Facebook already has in Europe may not be enough for the Calibra app. Given that Libra is not denominated in domestic currency, but reflects a currency basket, it is probably more like security from a legal perspective. This takes us right back to the discussion that has been haunting cryptocurrency for years: is it a security or something else? And there is more. The digital coin will be backed by a full reserve of low-risk safe assets, including government bonds.
Central bank buying government bonds has increased scarcity in various parts of the world including the eurozone. If Libra becomes successful, it could develop into a significant buyer of government securities, which could potentially further push interest rates into negative territory.
Germany, Switzerland, take note. Lawmakers and supervisors will have to decide quickly what Libra is, and how it is supposed to be regulated.
For years, central banks have been deliberating about cryptocurrency and central bank digital currency CBDC. But with the introduction of Libra, Facebook has now accelerated this discussion significantly. In any case, lawmakers and supervisors will have to decide quite quickly what Libra is, and how it should be regulated. There are many more issues to think about. For example, the exchange rate risk users and businesses would face, how secondary market liquidity will hold in challenging times, and the impact all this would have on competition in various sectors.
While a lot remains unclear at this stage, Facebook has clearly started a new chapter on digital currencies. Over to policymakers for a response. Cookies are small, simple text files stored in your computer, tablet or mobile phone when you visit a website or use an app. Some cookies are necessary, while others make the website more personal and relevant to you.
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I agree with the use of all cookies. I want to use limited functionalities on this website and agree to the use of strictly necessary cookies only. I understand that some functions will not be available. Should you Like it? In this article How will Libra work? What about central bank and regulators? The value for Facebook is not in the Libra currency itself, the transaction data is the real treasure trove From a technical perspective, the current centralised governance means using a blockchain architecture is unnecessary to add to the confusion, Libra claims to be a blockchain without blocks.
How will Libra work? Lawmakers and supervisors will have to decide quickly what Libra is, and how it is supposed to be regulated For years, central banks have been deliberating about cryptocurrency and central bank digital currency CBDC. The G7 report lays down the rules. Choose your cookie settings. Use all functionalities I want to use all functionalities on this website.
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Libra – A Differentiated View on Facebook’s Virtual Currency Project
Libra is to come in as a new currency for the whole world. This will reduce transaction fees and give 1. Read in this blog post how Libra should work, who will benefit from it and why the crypto currency threatens the role of banks and the currency monopoly of states. Mark Zuckerberg recently presented his plans for a new digital currency.
Facebook's Libra cryptocurrency to launch in January 2021
People typically think of money as something that exists mainly to facilitate the buying and selling of goods and services, or current account transactions. But in fact, one of the major uses, if not the major one, is to facilitate debt, investment, and other capital flows, including across national boundaries. Unless strictly regulated, its major use will probably be to facilitate capital flows. The most important one is that as the digital currency is now structured, the more successful Libra is the more it may facilitate destabilizing capital flows. I have never been terribly knowledgeable about digital and cryptocurrencies although like most people living in China, I pay for a lot of things with my WeChat app , but I had drinks at my home earlier this week with the very smart Cristian Gil. He is an old friend who at the turn of the decade started a digital-currency trading company called GSR as a hobby, only to watch the firm morph into a serious business. Here is what the white paper says:. Moving money around globally should be as easy and cost-effective as—and even more safe and secure than—sending a text message or sharing a photo, no matter where you live, what you do, or how much you earn. New product innovation and additional entrants to the ecosystem will enable the lowering of barriers to access and cost of capital for everyone and facilitate frictionless payments for more people. Rather, it is backed according to a specific ratio by five major credible fiat currencies U.
Facebook's long-awaited libra currency to reportedly launch in a limited form early next year
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The winners and losers in Libra’s murky future
In a limited sense, the same can be said about Facebook. So when it makes a big announcement, the world sits up and takes notice. Most recently, Facebook announced its intention to create Libra , a blockchain-based digital currency. A couple of things to note here, however: Libra is not a cryptocurrency, despite what press might think. A noble aim indeed, and Marcus, who leads Facebook's Libra company, Calibra, is correct that financial inclusion is an absolutely essential part of building a better world. So much so, that Facebook admitted in its latest quarterly report to the U.
Facebook cryptocurrency Libra to launch as early as January but scaled back: Report
After the financial crisis and the bitcoin boom, the social network launched a digital currency project aimed not so much at its active users, but at emerging markets with a more volatile traditional financial structure. On 18 June , Facebook presented, in a rather austere manner and the format of an academic white paper, its most ambitious project in the past years: the digital currency Libra. It was not an exclusive project of the company created by Mark Zuckerberg, but a kind of joint venture led by Facebook, together with 24 other partners, some as renowned as Visa, Uber or Mastercard. Libra was defined as "a simple, global currency and financial infrastructure capable of empowering billions of people [ The launch of Libra was planned for , but it soon became clear that it was not going to be a straightforward journey. Today, two years after the announcement, the digital currency, now called Diem, has not made substantial progress. What has happened? With Libra, the consortium led by Facebook did not really invent anything new.
Malaka Gharib. Now Facebook is entering the digital currency realm. The social media giant has helped develop a digital currency called Libra that plans to launch in
Facebook has unveiled an ambitious plan to launch an attack on the global financial system by creating a new cryptocurrency to be known as Libra, a payments system powered by blockchain and a digital wallet, as a precursor to moving into lending. Facebook's digital wallet, to be named Calibra, will be integrated into its Messenger and WhatsApp applications, and be available outside its communications platforms via a smartphone application that will allow users to send money as if they are sending a text message. The digital currency Libra will be backed by fiat currencies, distinguishing it from volatile and speculative bitcoin, but it will also compete with traditional money. Like bitcoin, it will be built on blockchain technology, allowing funds to move across borders at near real time and for almost no cost.
Their move, first reported in the Financial Times , follows the withdrawal of PayPal, announced last week. The project has drawn heavy scrutiny from regulators and politicians, particularly in the US. Facebook chief executive Mark Zuckerberg will appear before the House Committee on Financial Services on 23 October to discuss Libra and its planned roll-out. Regulators have raised multiple concerns over Libra, including the risk it may be used for money laundering. Mercado Pago, a payments firm serving mostly Latin America, also pulled out. It means of the six payments-related firms first involved in Libra, just one, PayU, remains. A spokesperson for Stripe said the firm supported the aim of making global payments easier.
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