Edited by Donell Newkirk. Photos courtesy for Reuters and Getty.
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Is Facebook about to change the way we pay for things online forever? The social media giant has just announced it is going to launch its own cryptocurrency, known as Libra, which it says will enable users to pay for things online anywhere in the world for next to nothing and instantaneously. The project has an impressive list of backers, Visa, MasterCard, Uber, Spotify, Lyft, 23 others, each of whom say they will invest $10m to get the scheme going.
And Facebook says it will be more stable than other cryptocurrencies such as Bitcoin because it will be backed by real assets, such as dollars. But has Facebook done its homework here? The day after the announcement, the G7 group of nations said it would start a working group to look at the possible systemic risks of such a cryptocurrency to the global financial system. Mark Carney, the governor of the Bank of England, said that if such a currency became popular it would certainly be systemic, and therefore subject to the highest forms of regulation.
I've been talking to regulators here in the US and it is clear they've not really been briefed at all on this project. They said they knew only the vaguest outlines of the scheme and would need to see a lot more detail before deciding how strictly they were going to look at it. For Mark Zuckerberg this might come as something of a disappointment as apparently the Facebook chief was hoping that Libra would be subject to only the lightest touch of regulation. But perhaps when dealing with something as important as the financial system, move fast and break things isn't necessarily the best credo.