EU to Launch Antitrust Investigation Against Libra

Margret Westagher, EU competition commissioner, believes the launch of Libra could lead to the creation of a completely separate economy
02 October 2019   193

EU competition commissioner Margret Westagher has launched an investigation into the digital currency project from Facebook. Her concerns are caused by the potentially anti-competitive nature of Libra.

In her opinion the launch of Libra could lead to the creation of a completely separate economy, which would put those who do not use digital currency at a disadvantage.

Westager called the investigation a “non-trivial step” for the agency, because for the first time they have to ask questions about what does not exist. The regulator will find out whether Facebook intends to become a platform for the sale of third-party goods and services.

Westager added that the EU central banks will study the risks to financial stability associated with Libra.

Meanwhile, the US Federal Reserve Board has expressed concerns that Facebook is creating a shadow banking system. Potential consequences for banks include the outflow of deposits and the decline in payments. The board on a rotational basis includes the heads of 12 American banks.

US Federal Reserve to Consider Digital USD Issue

If a some country or company issues digital money that is widely recognized, this could lead to the loss its status by the USD, fed official believes
17 October 2019   66

The US Federal Reserve is actively considering the possibility of issuing digital currency, fearing the dollar will lose its leading position in the global financial system. This was stated by President of the Federal Reserve Bank of Dallas Rob Kaplan, reports CoinDesk.

In his opinion, if a foreign government or company issues digital money that is widely recognized, this could lead to the loss of the status of the world's reserve currency by the dollar.

On the eve of the previous chairman of the Commodity Futures Trading Commission (CFTC), Christopher Giancarlo also expressed concern that the re-issuance by other countries of national currencies in digital form could lead to the dollar losing its dominant role in the world. He called for the release of a digital dollar on the blockchain.

Bank of England Governor Mark Carney said earlier that a digital currency like Facebook’s Libra can replace the dollar as a global reserve currency.

The emergence of an attractive and viable alternative to the dollar will reduce demand for US government securities, Kaplan said. This will lead to an increase in interest rates by 100 basis points (1%), which will increase the cost of servicing public debt by $ 200 billion per year.

I still think for the foreseeable future, the dollar will be the world reserve currency, we’re able to refinance our debt at relatively low rates, but I don’t think we should take that for granted.
 

Rob Kaplan

President, Federal Reserve Bank of Dallas

Kaplan noted that countries subjected to sanctions or increased trade tariffs by the United States are working most actively on the digital alternative to the dollar.