Libra, Facebook’s planned cryptocurrency, can put many financial system institutions in a difficult situation. The risk group includes central banks, credit institutions, and payment service providers, Deutsche Bank Research experts warned in a report.
Facebook’s goal is to offer the new cryptocurrency to 1.7 billion people worldwide who do not have a bank account. The basic difference between Libra and other cryptocurrencies will be that Libra’s value will not be directly determined by the market. The value of the currency is to be linked to a basket of world currencies and physical assets spread all over the world. Libra’s partners include companies specializing in payments, such as Visa, Mastercard, PayPal, and PayU. In addition, the project is also supported by companies including Uber, Vodafone, and Spotify.

According to Deutsche Bank Research experts, Libra will help its creators gain an advantage over banks thanks to the support of Facebook and other companies with millions of customers in Europe. Social media accumulate a huge consumer base and each of them can become a potential user of this cryptocurrency. The success of Facebook’s international cryptocurrency could lead to a decrease in the importance of the European Central Bank. In addition, governments’ and legislators’ abilities to introduce and enforce regulations would be limited.

European rules on personal data and taxation would not be able to fully cover Libra. This, in turn, would mean for Europe a deprivation of monetary power, which would be in the hands of a consortium of private companies, most of which are based in the US.

(300gospodarka)