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.


At Davos, innovative products point to a sustainable future

Updated 24 January 2020

At Davos, innovative products point to a sustainable future

  • A single tree that to bear 40 different types of apple

DAVOS: The World Economic Forum is not all about the fourth industrial revolution or the rise of AI.

You can also find all manner of strange and intriguing products on display from biodegradable plastic made from algae to wallpaper made from recycled corn husks.

One stand titled “How do you design a tree?” is part of a conservation effort where a single tree is designed to bear 40 different types of apple.

Another stand displays colored seaweed on a rack, showing how clothes can be dyed in a sustainable, non-chemically corrosive manner.

Propped along a large wall is Fernando Laposse’s wallpaper made of variations of purple corn husks that are reinforced with recycled cardboard and cork to create wallpaper and furniture. The husks come from corn that needs very little water and can be grown in the desert, which makes it all the more sustainable.

“This initiative helps the local economy as it brings in jobs and a resurgence of crafts and food traditions while also ensuring sustainability,” Laposse said.

Another display shows a machine that extracts pellets from a mixture of algae and starch and is used to create a thread that is the base of 3D printing. These sustainable, biodegradable plastics made from algae are being experimented with in different regions.

With the rise of deep fakes — a branch of synthetic media in which a person in an existing image or video is replaced with someone else’s likeness — another stand delivers a warning on the looming dangers of unregulated software.

The Davos forum prides itself on its sustainability, and key topics have included climate, mobility, energy and the circular economy. Everything is recyclable, and participants must download an application in order to keep up with the program and any changes — a move to cut down on paper waste.