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Facebook coin Libra threatens the stability of financial systems

2019-07-08 03:20 pm | Resource: News Section | No Views : 77

Facebook coin Libra threatens the stability of financial systems The Facebook coin Libra project, recently unveiled on Facebook, threatens the stability of financial systems, according to a South Korean financial regulator.
In a new update to trends in Korean, published last Friday and reported by CoinDesk Korea, the FSC is considering what might happen if "2.4 billion Facebook users around the world transfer their 10 bank deposits to digital currency Libra ".
If this scenario occurs, the solvency of banks will decrease, as will loan reserves, posing a threat to emerging markets from the transfer of capital to those countries.
FSC has also raised concerns about the possibility of bank management during financial or foreign exchange crises, where people move their national currencies to the balance. Simplifying the transfer of funds and the transfer of funds via Libra is also expected to limit the ability of central banks to control international capital movements. The effectiveness of monetary policy will also be limited if Facebook coin Libra becomes widely traded in the central bank's currency.
The agency also expressed concern that Libra could be widely used for money laundering without appropriate bank-like controls. "A major financial institution, such as Goldman Sachs or JPMorgan, has refused to take part in the project.
The project represents a major threat to the traditional banking industry, the report said. If a company such as Facebook buys a bond rather than a bank deposit with client money, the bank's financial situation may worsen. If the encrypted currency allows almost free external payments, the trillions of South Korean banks from the won revenue from remittances will be significantly reduced.
Facebook coin Libra is more likely to succeed than in other digital currencies. By providing financial services through social media services such as Facebook, Watasab and Instagram, with billions of users, the company can easily guarantee more convenience and competitive prices.
FSC confirmed that the report aims to "facilitate the understanding of the press and other media" of foreign trends and not its official opinion in this new currency.

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