G7 says Libra should not launch until risks ‘adequately addressed’

Small toy figures are seen on representations of virtual currency in front of the Libra logo in this illustration picture. (REUTERS/Dado Ruvic/File Photo)
Updated 18 October 2019

G7 says Libra should not launch until risks ‘adequately addressed’

  • A currency like Libra could undermine sovereign nations’ control over their exchange rates, warns France’s economy minister
  • If it enters circulation, Libra would offer an alternative to traditional bank financial transfers

WASHINGTON: Facebook should not launch its global digital currency Libra until proper regulations are in place to handle the potential risks, the Group of Seven said Thursday.
And France’s Economy Minister Bruno Le Maire warned that a currency like Libra could undermine sovereign nations’ control over their exchange rates.
“It’s a matter of democracy, not just a simple economic question,” Le Maire told reporters, saying Facebook’s currency could have an “immediate global reach” through the social network’s huge membership.
Le Maire presented the Group of Seven nation’s statement on Libra, saying “no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed,” including the potential for money laundering and terror financing.
But, he told reporters, “The key question is the question of sovereignty.”
“Do we want a private company to have... the same power, and the same sovereignty, as democratic states” over currencies.
Libra, which would be backed by reserve assets unlike cryptocurrencies like Bitcoin, has faced a steady drumbeat of stern warnings from central bankers and financial regulators.
European Central Bank board member Benoit Coeure presented a report on digital currencies to the G7 finance ministers, who are gathering on the margins of the annual meetings of the International Monetary Fund and World Bank.
The report said a framework for oversight of Libra “is an absolute prerequisite,” and urged regulators to coordinate their work to prevent issuers from seeking out the most favorable country from which to operate.
If it enters circulation, Libra would offer an alternative to traditional bank financial transfers, a disruptive change that has aroused resistance and skepticism.
Facebook’s digital currency chief David Marcus told reporters in Washington that the issues raised by Le Maire are “legitimate concerns.”
“We’re determined to answer these concerns with real solutions that will meet or exceed the standards of the current system,” he told a small group of reporters at an event in Washington.
Mark Zuckerberg, Facebook’s co-founder and chief executive, was in Washington as well Thursday, and is due to testify before the US Congress next week on the social media network’s impact on financial services.
The Libra Association, which will oversee Facebook’s proposed currency and officially launched Monday in Geneva, also said in a statement that Libra “is being designed to respect national sovereignty over monetary policy in the digital space, not undermine it.”
But central bankers remain concerned about the prospects.
Lael Brainard, an influential member of the US Federal Reserve board, said Facebook’s proposed currency presented a host of risks and regulatory challenges for preventing money-laundering and assuring financial stability, and could be a challenge to the traditional role played by banks.
“There are likely to be financial stability risks for a stablecoin network with global reach,” she said in a speech Wednesday. “If not managed effectively, liquidity, credit, market, or operational risks — alone or in combination — could trigger a loss of confidence and a classic run.”
China, which is not a G7 member and decided two years ago to block cryptocurrency transactions, has recently sped up plans to introduce its own digital money.
Libra also has faced challenges from within after major financial and commercial players in recent weeks have backed out of the project, including Visa, Mastercard, eBay, Stripe, PayPal and the online travel firm Bookings Holdings.
The 21 founding members include the online payments company PayU, the telecoms firms Vodafone and Iliad, as well as tech outfits Uber, Spotify and Farfetch, blockchain operations such as Anchorage, Xapo and Coinbase and the venture capital firms Andreessen Horowitz, Ribbit Capital and non-profits Kiva and Mercy Corps.


In streaming wars, Disney reaches beyond kids and families

Updated 30 min 49 sec ago

In streaming wars, Disney reaches beyond kids and families

  • Disney’s marketing force is reaching beyond its traditional family audience to send a message that its $7-a-month subscription service Disney+ offers something for all ages

LOS ANGELES: During commercial breaks in a broadcast of World Wrestling Entertainment’s WWE SmackDown, fans were shown ads for Walt Disney Co’s new streaming service, Disney+. So were “Monday Night Football” viewers and video gamers watching Twitch.
“Try to keep up,” said Captain Marvel in one ad after a series of fast-paced clips from “Star Wars,” “The Simpsons,” “The Avengers” and other Disney-owned hits from outside of its deep catalogue of children’s classics.
Disney’s marketing force is reaching beyond its traditional family audience to send a message that its $7-a-month subscription service Disney+ offers something for all ages. The service debuted on Tuesday in the United States, Canada and The Netherlands.
“It’s incumbent upon us to market it the right way to emphasize the fact that it’s not just for kids,” Disney executive Kevin Mayer said during a briefing at the company’s Burbank, California, headquarters. “It’s all family friendly, but everyone can enjoy this product.”
Disney has told investors it can hook 60 million to 90 million customers within about five years as it competes for customers in a crowded streaming market dominated by Netflix Inc. 
Signing up adults who do not have children at home is part of that plan.
Consumers may not realize that after a series of acquisitions Disney is much more than classics like “Cinderella” and “Mary Poppins” that charmed generations of families. The company now owns the celebrated “Star Wars” movie franchise; Iron Man, the Hulk and dozens of other Marvel superheroes; “Toy Story” animation house Pixar, and nature programming channel National Geographic.
Previously released movies and TV series from all of those brands, plus 30 seasons of “The Simpsons,” are available on Disney+ alongside decades of Disney’s family-centric offerings.
Disney+ also offers new programming from those brands.
To raise awareness, the company is promoting Disney+ during sports and primetime TV telecasts to get in front of what Hollywood calls the four quadrants of viewers: male, female, young and old.
“We’re unmatched in quality and appeal across our four-quadrant audience spanning a variety of genres, formats and arenas, and will continue to build on that year after year,” said Ricky Strauss, president of content and marketing for Disney+.
In addition to the wrestling, football and gaming contests, ads ran during the World Series and the ABC News late-night program “Nightline,” and on social media networks.
Early testing in The Netherlands, where Disney offered a free two-month trial of Disney+, attracted a “very large and diverse audience,” said Mayer, who runs Disney’s direct-to-consumer and international unit.
“Marvel’s Agents of SHIELD,” a series aimed at 18- to 49-year olds, ranked as the most-watched piece of content, Mayer said. Next was tween-oriented show “The Suite Life of Zack & Cody” followed by “Disney’s Mickey Mouse Clubhouse,” a cartoon for young children.
“Our hypothesis was we will have a lot of different types of viewership, that it’s not going to be centered among any one of our brands,” Mayer said. “It’s quite a nice confirmation of what we want accomplished.”
The initial response in The Netherlands has cheered industry analysts.
“They have some surprising and encouraging signs about this potential that Disney+ is not just kids and family,” Forrester analyst Jim Nail said.
But unlike Netflix, Disney+ limits how far its programming will go to attract older viewers. To keep it family friendly, the service will not have any R-rated movies or TV shows designated TV-MA for mature audiences.
Programming considered too adult for Disney+ may stream on Hulu, which Disney also owns. That will include FX series such as “American Horror Story” and “Fargo” and possibly movies starring Deadpool, a Marvel character known for foul-mouthed humor, when rights become available.
“There are boundaries to what we’ll put on Disney+,” Mayer said. “’Deadpool’ is definitely not for Disney+.”