Home NEWS Big techs may disrupt European financial system, ECB warns

Big techs may disrupt European financial system, ECB warns

by FAMOUS REPORTERS
0 comment 17 views
Kindly Share This Story

Senior Deputy Governor of the Bank of Italy, Fabio Panetta is seen standing in a corridor of the Bank of Italy ahead of his appointment to the European Central Bank’s executive committee, in Rome, Italy. September 26, 2019. REUTERS/Remo Casilli

Planned cryptocurrencies issued by global tech giants like Facebook might disrupt the European financial system, a European Central Bank board member warned Friday.

“Big techs may pose considerable risks from an economic and social perspective and they may restrict, rather than expand, consumer choice,” said Fabio Panetta, who sits on the ECB’s executive board.

“While they could offer convenient and efficient payment solutions,” Panetta said, “they also risk endangering competition, privacy, financial stability and even monetary sovereignty.”

READ MORE:  Johnson and von der Leyen decide fate of Brexit deal

Pancetta’s warning came as the coronavirus pandemic accelerates a shift towards cashless and digital payments, which the ECB director believes is likely to persist once the health crisis is over.

Facebook has been looking into creating its own cryptocurrency — known as a stablecoin — called Libra, which it touts as a way to lower costs for consumers around the world, eliminating the high fees of cross-border transfers.

But the plan has caused controversy and worried global regulators who expressed concern of a privately-run currency.

READ MORE:  Rocket fire hits base in Iraq housing US troops, killing 2 Americans, 1 Briton, military says

Stablecoins could mean money is reduced to a “club good”, offered in return for membership fees to a platform, Panetta said.

Europe should also avoid dependence on foreign providers for cashless payments that would “harm competition”, he added.

The ECB is currently undergoing a public consultation on whether to adopt a digital currency.

Panetta has previously expressed support for a digital euro as a way of reinforcing financial sovereignty of the European Union.

In September, the European Commission unveiled plans to regulate cryptocurrencies, proposing rules that could limit the development of Libra and similar projects.

“No global asset-backed crypto-asset arrangement should begin operation in the EU until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed,” they said.

The ECB “is the only one to be allowed to issue a currency,” French Finance Minister Bruno Le Maire previously said.

You may also like

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy