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Why the Fed should oversee Facebook’s Libra

The Honorable Sheila C. Bair
 

By Sheila Bair (Original source Yahoo Finance)

“Facebook (FB) Mark Zuckerberg’s recent announcement of ambitious plans to launch a new, global cryptocurrency called Libra has been met with understandable alarm, particularly among regulators and consumer advocates.

Much of the controversy has centered around antitrust issues, consumer privacy, and the ability of crooks to anonymously use the system for illicit purposes. Those are all legitimate concerns, but to my mind, the biggest risks are financial, both to users of Libra and the financial system as a whole. Those risks include the possibility of bank runs, credit disruptions, or consumer losses arising from foreign currency risks or financial mismanagement of the Libra reserve. The best way to understand these risks is to follow the money.”

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