Facebook wants to enter the "coin circle" BIS warns the technology giant

According to overseas media reports, US social giant Facebook recently released a white paper on its virtual digital currency project, which led to a huge earthquake in the price of virtual currency such as Bitcoin. However, this plan seems to have encountered obstacles.

The annual report of the Bank for International Settlements (BIS), known as the “Central Bank of the Central Bank,” said that large technology groups such as Facebook, Amazon, and Google are rapidly improving the efficiency of financial services, but they pose a potential threat to the entire financial system.

Recently, Facebook's global virtual currency project Libra officially launched and released a white paper. From the perspective of a large founding team, once Libra is released or landed, it will affect billions of users around the world and financial markets around the world, with far more influence than any current digital currency. After all, Facebook currently has more than 2.6 billion active users worldwide. The white paper also arrogantly claims that Libra is a tool to increase financial inclusion and will enable 1.7 billion people who cannot open bank accounts to access financial services.

BIS affirms the efficiency of technology companies in the financial services sector, especially in the payment field, and Libra's emergence has broken the exchange problem in the current payment field involving multinational business. BIS said that global regulators need to ensure a level playing field between technology giants and banks, taking into account the technology base, data privacy regulations and business models of technology companies.

BIS also warns technology companies to risk data abuse. Shen Yisong, BIS economic consultant and research director, stressed the need to adopt a more comprehensive approach, using financial regulation, competition policy and data privacy regulation, as a basis for formulating relevant public policies.

In addition to Facebook, technology giants such as Apple, Amazon and Google's parent company Alphabet have been involved in blockchain or virtual currency. Fed Chairman Powell said recently that the Fed will not include the Libra project that regulates Facebook on the agenda because the Fed does not have such power. Although Powell also acknowledged its risks, he bluntly said that "only when it involves consumer protection and money laundering will it enter the Fed's jurisdiction."

Bank of England Governor Carney also publicly expressed his support for Libra. Carney said he is "reviewing" Libra's open mind. Recently, with the soaring price of bitcoin and a breakthrough of 10,000 US dollars, its volatility has also caused market concerns, fearing that the high price fluctuations make Bitcoin a paradise for short-term speculators.

Source: Securities Times Network

Author: Ng Ka Ming,