Home Business NewsBusiness BoE’s stance on Libra diminishes its appeal

BoE’s stance on Libra diminishes its appeal

by LLB Editor
10th Oct 19 8:19 am

Following the Bank of England’s warning that Facebook’s Libra faces tough regulation, Dr Tong Wang, Lecturer in Business Economics at University of Edinburgh Business School, argues that compliance with government regulation would take away its competitive advantage.

“The super-sovereign nature of Libra makes dealing with cyber-crime more challenging. The Libra association will need to find a way to comply with the laws and regulations for preventing financial crimes, notably, the government’s need to deal with money laundering. If we take a position on the optimistic side, Libra may be able to fulfil all these technical requirements. Unlike Bitcoin, the Libra association is a centralised institution and it has the capabilities and resources to take the necessary actions. However, after complying with government regulation, how much competitive advantage Libra would have left would be another issue.

“The essence of Libra is substantially different from that of Bitcoin since it is more like a super-sovereign currency than a new form of electronic gold. So, if we regard Libra as a normal foreign currency, all the regulations and oversights applied to the foreign exchange market are also applicable to it.”

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