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Facebook Coin Libra gets the warning from The BIS

2019-06-24 10:22 am | Resource: News Section | No Views : 114

Facebook Coin Libra gets the warning from The BIS The Bank for International Settlements (BIS) warned that Facebook coin Libra and other currencies that major technology companies want to launch, such as Google and Amazon, could pose new risks to the traditional banking sector.
BIS, an international financial institution in Switzerland, supervised by 60 central banks worldwide, published a report setting its position on the digital currencies of technology companies sunday, June 23.
In the wake of the newly announced facebook coin Libra from the global social networking giant Facebook, the Bank for International Settlements (BIS) explained that although major technology companies can enter into financing, they can achieve efficiency gains and broaden financial coverage, regulators should step up risk mitigation measures New and complex.
According to BIS, the vast user base of major technology companies, access to user data and multi-faceted business models have the ability to rapidly change the financial services industry, the idea of ​​issuing Crypto is very serious to the current system.
The report pointed out that their low-cost structures are highly scalable, and the structure of the large-scale platform network can help to promote financial integration in under-funded populations.
However, the Bank for International Settlements (BIS) warned that the same features that bring benefits to them also have the potential to generate new risks and costs associated with market power.
The Bank for International Settlements (BIS) claims that major technology companies offer known risks - as well as new and unfamiliar ones - to the financial services landscape.
Among the issues identified, the bank noted the risks to technology giants that threaten financial stability and consumer protection that "could loom very quickly as financial institutions related to the system" - thereby disrupting the traditional banking sector and the existing structure of financial intermediation.
The report pointed out that these companies benefit efficiently from the "data network loop" that can accelerate their successful entry into finance, but this business model itself poses new and unprecedented challenges for regulators - especially competition and data privacy issues.
Given that companies such as Facebook transcend traditional regulatory boundaries and national boundaries, BIS calls for national and international coordination between authorities "to ensure a level playing field between large technology and banks."
Facebook published the white paper on its facebook coin libra project on June 18 this year.
International responses to the digital currency Libra have been mixed so far, including conflicting statements from the US Federal Reserve Chairman and a statement from the chairman of the Russian State Duma Committee on Financial Markets that the symbol will not be ratified in Russia.
At the same time, the Reserve Bank of Australia (RBA) governor reduced the possibility that the facebook coin Libra would be widely used before addressing related regulatory issues.

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