Tuesday , November 19 2019
Home / argentina / They claim that Facebook's cryptocurrency can threaten the banking business

They claim that Facebook's cryptocurrency can threaten the banking business

The wave, the criptodivisa announced by the technological multinational Facebook, has the potential to threaten banking units, according to two reports published this week by rating agencies Moody & # 39; s and S & P Global.

When led by Mark Zuckerberg, Libra introduced last week, he said it would be launched in the first half of 2020 with two main functions: transactions between individuals and payments. However, Facebook assured that the second time the provision of other financial services was planned.

"The launch of an alternative payment platform by a technology leader as common as Facebook will likely accelerate the market share of electronic payments on cash and checks," said Moody's analyst Robard Williams.

Similarly, S & P analyst Mohamed Damak also believes that "the development of the payment infrastructure will accelerate" when Facebook cryptocurrency is available to the public.

Among the 28 companies that have signed up to create the Libra Association, a company based in Switzerland will decide on the currency. There are several companies in the payment sector such as MasterCard, Visa, PayPal or Stripe.

One of the biggest threats posed by Libra is, according to the risk assessment agencies, the disruption of traditional banking operations.

"There is no bank among the 28 founders of Libra," said Damak. "This indicates some skepticism about their potential success and concern over the risks or a sign of the potential negative impact Libra may have on banking and its revenue," he added.

In this regard, Moody's analysts have added that, while Facebook is not the first company to launch a crypto competition, with its "huge" user base "can pose a threat" to banks if its use is extended between consumers and businesses. .

Precisely because of the size of the company that promotes cryptocurrency, regulators and central banks in several countries have already shown their caution and concern over implementation.

"Bank of England Governor Mark Carney said last week that Libra's" openness "should be" open, "Libra must submit to" the highest regulations ".

The same week, his US counterpart, Federal Reserve Chairman Jerome Powell, pointed out that Facebook had made many contacts with regulators and supervisors around the world to discuss their plans, including the Fed itself.

"I'm not worried about the fact that central banks can't implement monetary policy because of cryptocurrency," says the US.

His deputy president, Luis de Guindos, said in part that although he could not say "a priori", monitors would have to set regulatory conditions "as high as those for other systems of payment".

The report prepared by Moody & # 39; s also refers to this point. "The assumption of new forms of currency that is far from public control poses a number of problems for the countries, as crypto competition can affect the ability of central and regional banks to implement their monetary policy," Williams warned.

Source link