«The evolution of payment infrastructure will accelerate»
Posted: Tue Jan 07, 2025 9:00 am
Libra , the cryptocurrency announced by the multinational technology company Facebook, has the potential to threaten the business of banking institutions , according to reports published this week by the credit rating agencies Moody's and S&P Global.
Libra, which is set to launch in the first half of 2020, will have two main functions: peer-to-peer transactions and payments , Facebook said. However, the company led by Mark Zuckerberg plans to provide other financial services in the future.
"The launch of an alternative payments platform by a technology leader as ubiquitous as Facebook is likely to accelerate the market share of electronic payments over cash and checks," said Moody's analyst Robard Williams.
S&P analyst Mohamed Damak also believes that " the evolution of the payment bahrain phone number infrastructure will accelerate " once Facebook's cryptocurrency is available to the public.
As we announced a few days ago , companies from the payment sector such as Mastercard, Visa, PayPal or Stripe are part of the 28 companies that have joined together to create the Libra Association, an entity based in Switzerland that will make decisions regarding the currency. Although one of the greatest threats posed by Libra, according to risk rating agencies, is the disruption of the traditional banking business .
“There are no banks among the 28 founders of Libra,” Damak said. “That is either an indication of some skepticism about its potential success and concerns about the risks involved or a sign of the potential negative effect Libra could have on the banking business and its revenues,” he added.
Although Facebook is not the first company to launch a cryptocurrency, its “huge” user base “could pose a threat” to banks if its use spreads among consumers and businesses. That is why regulators and central banks in several countries have already expressed caution and concerns about its implementation.
Bank of England Governor Mark Carney has said that while Libra needs to be "open-minded" to its " potential utility ," it will need to be held to "the highest regulatory standards."
The vice-president of the European Central Bank (ECB), Luis de Guindos, has expressed a similar view: supervisors should establish regulatory conditions "as high as those that exist for other payment systems."
Libra, which is set to launch in the first half of 2020, will have two main functions: peer-to-peer transactions and payments , Facebook said. However, the company led by Mark Zuckerberg plans to provide other financial services in the future.
"The launch of an alternative payments platform by a technology leader as ubiquitous as Facebook is likely to accelerate the market share of electronic payments over cash and checks," said Moody's analyst Robard Williams.
S&P analyst Mohamed Damak also believes that " the evolution of the payment bahrain phone number infrastructure will accelerate " once Facebook's cryptocurrency is available to the public.
As we announced a few days ago , companies from the payment sector such as Mastercard, Visa, PayPal or Stripe are part of the 28 companies that have joined together to create the Libra Association, an entity based in Switzerland that will make decisions regarding the currency. Although one of the greatest threats posed by Libra, according to risk rating agencies, is the disruption of the traditional banking business .
“There are no banks among the 28 founders of Libra,” Damak said. “That is either an indication of some skepticism about its potential success and concerns about the risks involved or a sign of the potential negative effect Libra could have on the banking business and its revenues,” he added.
Although Facebook is not the first company to launch a cryptocurrency, its “huge” user base “could pose a threat” to banks if its use spreads among consumers and businesses. That is why regulators and central banks in several countries have already expressed caution and concerns about its implementation.
Bank of England Governor Mark Carney has said that while Libra needs to be "open-minded" to its " potential utility ," it will need to be held to "the highest regulatory standards."
The vice-president of the European Central Bank (ECB), Luis de Guindos, has expressed a similar view: supervisors should establish regulatory conditions "as high as those that exist for other payment systems."