The Libra Association holds influencial details concerning the future of banks, particularly when Libra cryptocurrency becomes a reality in the next one year. If the project materializes, 1.7 unbanked individuals around the world will become banked, and such a reality is enough to place the conventional banking system on the extinction pedestal.
The project places a significant risk to financial stability to the countries around the world. The South Korean Financial Services Commission advises that 2.4 billion Facebook users could cause unpleasant financial consequences to the global financial systems if they transfer just 10 percent their monies from banks to Libra. This, the watchdog observes, would diminish the banks’ solvency and loan reserves so dangerously that it would cause the relocation of the capital from emerging countries.
Libra also opens a door for money laundering through any of its partners from bad economies. This is because regardless of how tight the Libra’s anti-money laundering efforts are their partners in bad economies will be bent allow users to sneak in unaccounted money into the system.
Libra Association is a no-bank affair. The association has payment processors and Calibra, and prominent banking representatives are conspicuously missing. Its motive seems to engulf banking institutions and systems before marketing the private currency as a dominant and stable means of exchange.
Libra is undeniably causing jitters in the banking systems and its impact when it becomes fashionable to 2.4 Facebook users cannot be assumed. It will change the banking system and annihilate the weaker currencies.