Date
15 December 2019
Facebook’s Libra project will come under intense scrutiny from governments and regulators amid fears that the digital currency could pose a risk to financial markets. Photo: Reuters
Facebook’s Libra project will come under intense scrutiny from governments and regulators amid fears that the digital currency could pose a risk to financial markets. Photo: Reuters

Hurdles to Facebook’s Libra plan

Facebook said in mid-June that its subsidiary Libra Network will set up a Libra Association with 26 founding members.

The Libra Association will issue a cryptocurrency called Libra. Visa, MasterCard, Uber, PayPal, eBay, Lyft and Spotify are among the high-profile entities that have been brought on board as partners. 

Facebook had 2.3 billion users as of the first quarter of 2019. Add to that unit Instagram’s one billion users and WhatsApp’s more than 1.5 billion users, the social network giant surely has a massive potential user base for Libra.

Libra can help underdeveloped nations improve capital flows in their countries and enhance their financial systems, company executives claimed.

A big-scale cryptocurrency plan like Libra could, however, exert huge impact on existing digital currencies like Bitcoin.

Meanwhile, governments of major countries are concerned about how Libra may affect the financial markets, or whether it will be used in a bad way by criminals.

The US Congress last week asked Facebook to pause development on its Libra cryptocurrency and e-wallet Calibra amid worries that Libra could bring shocks to global financial markets without proper regulation.

This article appeared in the Hong Kong Economic Journal on July 9

Translation by Julie Zhu

[Chinese version 中文版]

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RC

Hong Kong Information Technology Federation honorary chairman