Sweden’s Financial Market Minister says that there are risks with the soon to be launched Facebook cryptocurrency, Libra.
Facebook is planning on launching the new cryptocurrency in the first half of 2020, working alongside of some big name partners such as Mastercard, Visa and PayPal, eBay and Uber, to do so.
How Libra will work
Unlike Bitcoin, Libra will be tied to, and backed by, physical assets such as bank deposits and currency government securities.
This will, in turn, make Libra less susceptible to “speculative bubbles and flash crashes” than existing cryptocurrencies.
Warns of its risks
Per Bolund, who is Minister for Financial Markets and Housing and Deputy Minister for Finance in Sweden, had this to say about Libra:
“As a user I would advise people to not make to big an investment in, or have too much money in this type of virtual currency, because there are big risks associated with them.”
Stronger measures taken
Sweden is in the process of implementing stricter rules regarding cryptocurrencies than those that will be put into place by US authorities, Swedish radio reports.
This is a measure taken to prevent money laundering Bolund stated, “[to] set demands that even they [Facebook] must have customer due diligence and know how the money you are handling is produces, that they are not procured using criminal methods”.
Facebook emphasised that 1.7 billion users worldwide will be able to use Libra as a payment method regardless of if they have a bank account.
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