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Risks from Facebook's Libra must be addressed before launch - Bank of France official

Tue, 15th Oct 2019 15:38

By Tom Wilson

LONDON, Oct 15 (Reuters) - The risks posed by
cryptocurrencies such as Facebook's Libra must be addressed
before any launch, a senior Bank of France official said on
Tuesday, adding to a chorus of regulatory scepticism that
threatens to derail the project.

Since Facebook announced its plans for Libra in June,
politicians and regulators around the world have voiced concern
about the project, saying it risked upsetting global financial
stability, undermining users' privacy and enabling money
laundering.

In the latest warning shot, Denis Beau, first deputy
governor of the Bank of France, said the widespread use of such
cryptocurrencies was fraught with peril.

"If they were to take off, they would raise additional
issues in terms of competition, policy, financial stability and
monetary policy," he told Reuters in an interview.

"It's really important that this is understood and the risks
are addressed before any possible rollout."

The Libra Association, a body set up by Facebook to oversee
the project, said on Monday that the cryptocurrency's launch,
planned for June 2020, may be delayed because of regulatory
hurdles. The comments came after a quarter of Libra's initial
members, including major payments firms Visa and
Mastercard, abandoned the project.

Libra is a so-called stablecoin, differing from most other
cryptocurrencies in that it will be backed by a reserve of
real-world assets, including bank deposits and short-term
government securities.

The structure is intended to foster trust and stabilise the
price volatility that plagues cryptocurrencies and renders them
impractical for commerce and payments.
(Reporting by Tom Wilson; Editing by Pravin Char)

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