Some banks fear that their days are numbered
According to its creators, Facebook’s cryptocurrency – or Libra, as it is called – is intended to serve as a means of payment for users who want to receive the services and products they need every day. They will be able to use the currency to purchase these products either through Facebook or through the websites of resellers-intermediaries. Despite such innocuous, at first glance, intentions, some banks are concerned that their days are numbered, writes Live Bitcoin News.
The intended goal of the social network is to provide users with financial independence and ultimately eliminate banks from this equation, which have greater control over the users’ funds. Several banks have already said that they have just recovered from the 2008 financial crisis, and Facebook’s cryptocurrency could potentially cause even more damage to the global banking system and put an end to traditional finance.
One of these banks is the Bank for International Settlements (BIS), which recognizes the advantages of Libra, but fears that with its release confidentiality issues may arise.
Although cryptocurrencies are promising forms of financial technology, the stability of digital assets is still questionable, said economic advisor and head of research at BIS Hyun Song Shin. At the same time, he acknowledged that users are likely to pay a lower commission for transactions with Libra.
In addition, Shin is concerned that the level of crypto-competition and the associated money technology market will be too high for traditional banks. This is the space that allows people to use their mobile phones and similar devices to make payments, access their accounts and transfer funds – something that banks cannot boast of.
The opinion of a BIS representative was voiced after Facebook co-founder Chris Hughes expressed concern that the company’s entry into the cryptocurrency market could give it too much power. And this very thought scares him.
“If it achieves even modest success, Libra will be able to transfer most of its control over monetary policy from central banks to private companies. If global regulators do not act now, it may soon be too late, ”said Hughes.
As the newspaper notes, the use of Libra and other cryptocurrencies can put an end to the current global financial infrastructure, while at the same time putting pressure on the digital market, which has not yet fully formed.