US monetary official warns of risks from rapid spread of Facebook’s bitcoin Libra

Facebook’s digital currency Libra is designed to be backed by a basket of currency assets to avoid the wild swings of bitcoin and other cryptocurrencies. (Reuters)
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Updated 18 December 2019

US monetary official warns of risks from rapid spread of Facebook’s bitcoin Libra

  • Expected to launch in the first half of 2020, Libra is designed to be backed by a basket of currency assets
  • Facebook’s project has been met with fierce resistance from officials worldwide

FRANKFURT AM MAIN: Digital currencies can be risky, but Facebook’s Libra could be a massive challenge given the potential for rapid spread and the dubious safeguards, a Federal Reserve official said Wednesday.
“Cryptocurrencies already pose a number of risks to the financial system, and these could be magnified by a widely accepted stablecoin for general use,” Fed Governor Lael Brainard said in a speech.
Expected to launch in the first half of 2020, Libra is designed to be backed by a basket of currency assets to avoid the wild swings of bitcoin and other cryptocurrencies.
But Facebook’s project has been met with fierce resistance from officials worldwide, especially due to the lack of clarity over how it will be governed and monitored.
“With nearly one-third of the global population as active users on Facebook, the Libra stablecoin project stands out for the speed with which its network could reach global scale in payments,” Brainard said.
And unlike national currencies that are backed by central banks, and deposits insured by governments, it is “not clear whether comparable protections will be in place with Libra, or what recourse consumers will have.”
“Without requisite safeguards, stablecoin networks at global scale may put consumers at risk.”
And because Libra could be distributed worldwide upon launching, regulation and oversight must be global since no one country could handle it alone, Brainard said.
She noted the “staggering” losses from fraud and theft of cryptocurrencies from $1.7 billion in 2018 to over $4.4 billion in 2019, based on one industry estimate.
“The hacking of exchanges represents a significant source of the theft,” she said.
A Facebook official last month said Libra would take decades rather than years to establish itself.
And in response to the resistance from regulators, the social media giant’s chief executive Mark Zuckerberg last month opened the door to scaling back plans for Libra if it cannot win approval as a new currency for global exchanges.


Dubai announces $136 million extra stimulus package

Updated 24 October 2020

Dubai announces $136 million extra stimulus package

  • The announcement takes Dubai's total stimulus measures this year to 6.8 billion dirhams

DUBAI: Dubai has announced a new 500 million dirhams ($136.14 million) stimulus package to support the local economy, taking Dubai's total stimulus measures this year to 6.8 billion dirhams, the crown prince of the emirate said on Twitter on Saturday.
"The private sector is a major partner in Dubai's development process, and we have adopted a set of new exemptions for some fees and a reduction in rents for some sectors, as well as an extension of the validity of a previous set of exemptions from fees," said Sheikh Hamdan bin Mohammed Al-Maktoum.