Odaily Frontline | Libra is not explicitly banned: Will Singapore be the first adopter of "crab eating"?

This article comes fromFinancial TimesFinancial Times

Odaily Translator: Nian Yin Si Tang

, original author: Stefania Palma

Odaily Translator: Nian Yin Si Tang

Singapore has joined the ranks after regulators in various countries called for a coordinated approach to Facebook's digital currency Libra. The governor of the central bank of Singapore has warned that Libra will cause global financial risks, and regulators in various countries must respond.

The launch of Libra raises "existential questions," Menon said.

Menon’s warning in Singapore, one of Asia’s most tech-friendly financial hubs, comes after U.S. President Donald Trump and both Germany and France have spoken out against Facebook’s digital currency.

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Germany and France have publicly opposed Libra

Earlier this month, French Finance Minister Bruno Le Maire said Libra could not operate in Europe under current conditions, citing systemic financial risks, sovereignty concerns and the potential for abuse of market dominance, Reuters reported.

Shortly after Facebook announced its plans for Libra in June, Trump launched a fierce attack on cryptocurrencies, including Libra, warning that Facebook could be subject to sweeping banking regulation if it were to launch the project.

Meanwhile, European Central Bank policymaker Benoit Coeure said private stablecoins could challenge the dollar's global dominance, backing Bank of England Governor Mark Carney's call for an international central bank digital currency. Coeure recently told the Future of the International Monetary System conference in Luxembourg that the wave of globalization and the rapid development of online services has boosted consumer demand for cross-border, faster payment services. Companies such as Facebook’s Libra are trying to cater to this demand, but at the potential cost of reduced security, which is where central banks come into play. Coeure, who also chairs the Group of Seven (G7) working group on stable currencies, said: “Under certain circumstances, if allowed to develop, private digital forms of money could challenge the dollar’s ​​hegemony more easily and faster than currencies issued by other sovereign nations. .The next natural step would be for global central banks to band together to study the feasibility of central bank digital currencies based on common technical standards.”

Libra representatives met with officials from 26 central banks, including the Federal Reserve and the Bank of England, in Basel on Monday, the first major meeting with policymakers since its announcement.

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Will Singapore be the first Libra adopter to "eat crabs"?

Menon has been in discussions with Facebook. He said Singapore did not have enough information to judge whether it would ban Libra.

He insisted that he was not "arbitrary" that private currencies were doomed, but said there were still "external barriers and inherent drawbacks" to their functioning. “Private currencies haven’t done anything extraordinary in the past 3,000 years,” he said.

Menon said private currency issuers are incentivized to debase their currencies, and that their "commercial and private considerations" can hinder the stability and trust in currencies that protect their value and keep inflation low. Low level key factor. "That's why central banks were born ... to protect the value of currencies."

Menon conceded that Libra could jeopardize macro-financial stability given Facebook's size and popularity. He also has doubts about how Libra, which is pegged to a basket of currencies, will affect global currency trends and capital flows, given that Facebook will need to maintain reserves of the pegged currency if trading volumes surge.

While Facebook executives have told regulators they will keep Libra stable, the question of whether the company will become an independent, publicly accountable entity, as central banks want, remains unanswered.