South Korea’s FSC sees financial instability risks with Facebook’s Libra


  • FSC says that Libra threatens the bank’s solvency as well as their loan reserves.
  • Lack of proper regulations could encourage money laundering using Libra.

The recently announced Facebook digital asset referred to as Libra continues to attract regulator interest cross the world with South Korea’s Financial Services Commission (FSC) being the latest to comment on the risks associated with it. The FSC July 5 trends update tries to put into consideration what could happen “If 2.4 billion Facebook users worldwide transfer one tenth of their bank deposits to Libra.”

Also Read: Bitcoin price analysis: BTC/USD bulls awake as price grinds closer to $12,000

The trend update reckons that if such a scenario occurs, then the bank’s solvency diminishes as well as the loan reserves. This in turn would pose a threat to emerging markets as funds are relocated from the various countries. According to CoinDesk the FSC:

“Raised concerns that bank runs could occur during financial or foreign exchange crises, as people move their national fiat currency to Libra. The simplification of money exchange and remittances through Libra is also expected to limit central banks’ ability to control international capital movements. The effectiveness of monetary policy would also be limited if Libra becomes widely exchanged for central bank currency.”

The FSC also said that without proper regulations, Libra could be haven for money laundering. Moreover, Facebook’s Libra working as a global money remittance means could greatly affect bank’s revenues from the transactions in South Korea.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets prepare for a bullish October

Bitcoin price is experiencing a momentary downswing as it sets up a falling wedge pattern. Similar to the big crypto, Ethereum price is also forming a bullish pattern. However, Ripple seems to be bouncing off a support floor without any technical formations in play.

More Bitcoin News

XRP and XLM in trouble as CBDCs aim to make cross-border remittances cheaper and faster

The outcome of recent Central Bank Digital Currency (CBDC) pilots shows slashed cost and reduced transaction time. Cryptocurrencies currently utilized for making cross-border settlements, Ripple (XRP) and Stellar Lumens (XLM), are likely to face stiff competition from CBDCs. 

More Ripple news

Shiba Inu price stabilizes as SHIB bulls prepare for 20% take-off

Shiba Inu price saw a massive uptrend on September 16 but was soon undone in the next couple of days as it approached a stable support floor. Investors can expect SHIB to launch here, retesting crucial resistance barriers.

More Shiba Inu News

Cardano price eyes 30% breakout if ADA bulls can overcome this strong hurdle

Cardano price is in a suspended state after its recent breakout from the bullish pattern. If ADA finds a launching pad, there is a high chance a new uptrend begins. Interestingly, there is a confluence of support, indicating a bullish outlook.

More Cardano News

BEST CRYPTO BROKERS/EXCHANGES



Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP