Facebook’s Libra currency under fire

Libra has raised eyebrows among the world’s financial regulators, including the Bank of England, the European Central Bank and the US Federal Reserve. (File/AFP)
Updated 14 July 2019

Facebook’s Libra currency under fire

  • Libra will be co-managed by 100 partner firms, including Facebook’s newly-minted financial services division Calibra
  • Libra, which is widely regarded as a challenger to dominant global player Bitcoin, is expected to launch in the first half of 2020

LONDON: Facebook’s planned virtual unit Libra, already under heavy attack from US President Donald Trump and global regulators, faces skepticism among the wider cryptocurrency community as well.
One theme — besides Brexit — dominated discussion among the movers and shakers from London’s financial technology or FinTech industry as gathered for their annual get-together: the future of virtual currencies.
“Can I just ask you to raise your hand if you would not be willing to use Libra?” asked the moderator at an event at London’s recent ‘FinTech Week’.
In the room, filled with about 100 experts and media who closely track the sector, about two-thirds of participants raised their hand to express distrust at the upstart currency.
Helen Disney, founder and boss of Unblocked Events, which promotes the blockchain technology that powers many cryptocurrencies, acknowledged growing doubts over who exactly would oversee and regulate Libra’s operation.
People are “concerned about how the governance... would work,” Disney told AFP.
“The cryptocurrency community is very libertarian in thinking,” its “about giving power to the people, democratization of finance, keeping away from big banks and companies who control (the) economy,” she said
Last week’s gathering came one month after Facebook announced to the world its plans for the virtual currency.
Libra, which is widely regarded as a challenger to dominant global player Bitcoin, is expected to launch in the first half of 2020.
Whereas Bitcoin is decentralized, Libra will be co-managed by 100 partner firms, including Facebook’s newly-minted financial services division Calibra.
The companies behind Libra — which will be backed with a basket of real-world currencies — include payment giants Visa, MasterCard and PayPal, as well as taxi-hailing services Lyft and Uber.
To access Libra on smartphones, users will go through a virtual wallet that will also be named Calibra.
While Facebook boasts an enormous customer base dotted across the globe that should facilitate Libra’s uptake, it firm also been plagued by privacy concerns that could make users hesitate.
“Can’t wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook,” said Sarah Jamie Lewis, head of non-profit research organization Open Privacy.
Libra has meanwhile raised eyebrows among the world’s financial regulators, including the Bank of England, the European Central Bank and the US Federal Reserve.
But Disney believes that Libra will finally force regulators to present clear regulation guidelines, as demanded by the cryptocurrency community itself.
“We have been waiting for a long time for a clearer signal (regarding) the regulation of cryptocurrencies and digital assets,” she said.
But James Bennett, head of cryptocurrency research firm Bitassist, argues that Libra should not be seen in the same light as Bitcoin.
“In the long run, people may realize that Libra is not a cryptocurrency,” Bennett said at the FinTech Week event.
“A true cryptocurrency should be resistant to attacks by all parties, from sovereign states to global corporations,” he said, adding that “cryptocurrency is a type of money used to transfer value over the Internet that cannot be stopped, confiscated or destroyed by any single entity.”
Trump has meanwhile unleashed a vicious attack on virtual currencies, slamming them for their alleged shadowy nature and arguing that Libra had no standing nor dependability — unlike the dollar.
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” Trump tweeted Thursday.


Oil retreats in face of renewed coronavirus uncertainty

Updated 22 February 2020

Oil retreats in face of renewed coronavirus uncertainty

  • G20 finance leaders to meet in Saudi Arabia at the weekend to discuss risks to the global economy
  • OPEC+ has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs

LONDON: Oil prices fell on Friday as weak Asian data and a rise in new coronavirus cases fuelled uncertainty about the economic outlook while leading crude producers appeared to be in no rush to curb output.

Brent crude was down $1.56, or 2.6 percent, at $57.75 in afternoon trade, while U.S. crude dropped $1.25, or 2.3 percent, to $52.63.

"With Brent failing to breach the $60 level on Thursday despite better than expected U.S. oil inventory data, rising market uncertainty is dragging down oil prices on Friday," said UBS analyst Giovanni Staunovo.

"Market participants who benefited from the price rise in recent days might prefer not to go into the weekend with a long position."

 

China reports rise in coronavirus cases.

Japan factory activity shrinks at fastest pace since 2012.

Russia says early OPEC+ meeting no longer makes sense.

Finance leaders from the Group of 20 major economies meet in Saudi Arabia at the weekend to discuss risks to the global economy after new Asian economic and health data kept investors on guard.

Beijing reported an uptick in coronavirus cases on Friday and South Korea reported 100 new cases, doubling its infections. In Japan, meanwhile, more than 80 people have tested positive for the virus.

Factory activity in Japan registered its steepest contraction in seven years in February, hurt by fallout from the outbreak. 

"We still believe that the market is likely to trade lower from current levels, given the scale of the surplus over the first half of this year, and the need for the market to send a signal to OPEC+ that they must take further action at their meeting in early March," said ING analyst Warren Patterson.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood it would no longer make sense for the Organization of the Petroleum Exporting Countries and its allies to meet before the planned gathering.

The group, known as OPEC+, has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs.