Facebook’s Libra digital currency is vulnerable to economic shocks, writes Bloomberg, citing analysts at banking holding JPMorgan. According to the source, the project will not be able to provide the level of security that the current payment systems offer.
Firstly, we are talking about a bottleneck issue – when the network capacity is limited, and the activity of participants does not stop to grow.
JPMorgan emphasized that Libra and other stablecoins can take a significant share of global transactional activity in the future, but their mechanisms of operation are different from traditional payment systems. That is why network paralysis amid a crisis can have negative macroeconomic consequences.
Analysts also pointed out that the development of the Libra ecosystem and operating expenses for network should be covered by the profitability of the reserve. However, most of the assets currently demonstrate negative returns. The company is confident that this makes the system vulnerable.
Recall, Facebook introduced the digital currency Libra in June. Many details regarding its operation were revealed by Calibra CEO David Marcus, speaking to the US Congress.
Source: en.bit.news
