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Showing posts with label Bitcoin. Show all posts
Showing posts with label Bitcoin. Show all posts

Tuesday 16 April 2024

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PETALING JAYA: The four-year cyclic bitcoin halving event and fresh liquidity, especially institutional money, have driven the cryptocurrency market to fresh highs this year upon gaining more acceptance as an alternative asset class, albeit being a far more volatile one.

But as the drums of war got louder in the Middle East early Sunday, bitcoin was the first to reflect investor sentiment, falling some 9.9% or US$6,714 to a low of US$61,231 before fresh buying saw it trading at US$64,246 as at press time.

The fresh buying is a clear indicator that the crypto market is maturing, said Scarlett Chai, country manager of Luno Malaysia, as it now has made its way to institutional investors via centralised asset fund managers from being an asset class that was previously exclusive to the decentralised community.

The halving event, which is due to happen this week on April 19-20, could also provide price support. Historical data has shown that price corrections typically happen two years after every bitcoin halving, as this trend has been visible in the past three halvings.

However, this cycle looks very different to previous cycles with bitcoin reaching all-time highs near the halving for the first time in its history and with prospects of war as a headwind or even a tailwind.

“It is difficult to ascertain the scale of the upcoming halving’s impact on bitcoin prices. We need to understand that the crypto market, specifically bitcoin, is now different following the inflow of institutional investors. This new liquidity via exchange-traded funds (ETFs) might put the market on a new course,” Chai told StarBiz.

She added that with gold recently breaking its all-time high and should bitcoin be viewed as digital gold, they might share a similar momentum.

Scarlett Chai, Luno Malaysia Country ManagerScarlett Chai, Luno Malaysia Country Manager

For some the fresh liquidity, estimated at US$13.8bil year-to-date, and the halving event could be more oxygen to a bubble, which could all end badly with systemic implications to the global financial system.

“The anticipated halving and the increased cash inflow, particularly after the ETF, has driven up cryptocurrency prices. There is little doubt that there is a bubble as there is no intrinsic or underlying value.

“This may simply be a modern version of the Tulip mania,” warned Obiyathulla Ismath Bacha, professor of finance at the International Centre for Education in Islamic Finance.

Nevertheless, with cryptocurrency gaining traction in Malaysia, Luno has recently launched its staking option on its trading platform.

Chai said the latest feature on its mobile application platform called staking was something its Malaysian clients had been asking for.

“We are the first regulated exchange to bring staking here. We launched last year and it was a long-awaited feature for the local market. Staking using ethereum is now available and we know it is suitable for the current Malaysian market,” she says.

Chai explains staking is locking up a certain amount of cryptocurrency, in this case ethereum, on the platform while allowing it to participate in a blockchain network. This also means that one’s stake grows and rewards are compounded.

“It’s just like having an asset, you can either hold on to it or lock it up so it grows. Locking it up will help the digital system, which is a computer-based network, become more secure and functional,” she said.

While the coins are being staked, users cannot sell or remove their coins but Luno will allow them to “unstake” from their wallets.

Chai added it took some time for this feature to be approved by the regulatory boards and the group is looking at launching a second coin for this feature.

“We are on track for the launch of a second coin and we believe staking should be made available for more asset classes. With all our features, we aim to make it safe and simple to participate in the cryptocurrency industry,” she said.

Luno Malaysia currently offers an instant buy-and-sell option or an exchange programme, both with distinctive features to suit a user’s risk appetite for investment.

Chai said there are 11 digital assets that have been approved by regulators and using the platform has been made easier and more seamless.

“Users can now use Touch ‘n Go, bank transfers or even FPX to choose which coin they would like to transact from as low as RM1. Then we have the exchange, which is for more sophisticated users, those that know how to read charts to study pricing and are familiar with market trends,” she said.

Chai points out that despite initial concerns on data privacy and the volatility of the cryptocurrency world, the industry has been very popular in Malaysia.

“So far, we’ve got some 840,000 users on the platform. Luno has been around since 2015 but in 2019, we relaunched ourselves in the market under the purview of the Securities Commission’s (SC) guidelines,” she said.

This means there are hard guidelines on how the platform can operate and Luno is answerable to authorities should any concerns arise.

Chai stated last year was a strong learning curve for the group as it showed the crucial role it could play in allowing users to invest in digital assets.

“It became important for us to address and create awareness on scams or “too-good-to-be-true” offerings. And because of this financial literacy is really vital,” she said.

Luno Malaysia has participated in various community events like exhibitions and campaigns where the need to create a better understanding on digital wealth management comes up.

“We look forward to participating in more national scam campaigns with financial institutions and such for educational purposes. We have even been in universities to speak to students and how they can avoid scams,” Chai said.

The most active group on the platform are aged between 30 and 49, Chai notes, because they have higher disposable income, but Luno has seen an increase in downloads and participation by those in the 20 to 29-year age range.

“This is their domain, and Luno targets audiences that are interested in investment and are retail-focused. In the next couple of years, we hope to hit one million users on our platform,” she said.

Meanwhile, Chai noted digital wealth management is just another form of investing, same like bonds or stocks.

“We are moving into an era where there is a blend of traditional finance and digital assets, as more markets worldwide regulate crypto and are catering to people who want to diversify more,” she said.

One piece of advice Chai gives is always start small, make yourself aware of what’s out there and be ready to put in what you can afford to lose.

“With every form of investment, the risk of losing is there. People adjust their portfolios to meet their personal strategy. Never go into an investment without a strategy, because then, you’d be basing it on your emotions and that is not how it should be done,” she advised.

In 2024, Luno users can look forward to more coins being added on the platform, subject to regulatory approval of course.

“We added two coins last year and we are looking at adding another five. We work closely in collaboration with the SC and will continue on that journey with them as we bring more offerings to people in Malaysia,” Chai said.

On top of that, with the aim to maintain the highest levels of security, Luno has introduced monthly proof of reserves reports.

Through this process, the exchange ensures each customer’s assets are maintained on a one-to-one ratio on the platform, illustrating that customer-stored digital assets match with the balance in their Luno wallets.

Chai said as there was no regulatory obligation to publish proof of reserve reports, the group saw an important step to build trust in the crypto space.

“Luno’s 12 million global customers – with over 840,000 of those in Malaysia – can be rest assured that their wallets do contain the crypto stated.”

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Related article:

Financial planner falls for scam | The Star



Saturday 5 March 2022

Cryptocurrencies not recognised as legal tender in Malaysia

 `

Cryptocurrency Not To Be Considered 'Legal Tender'; Centre To Treat It Like Stocks & Bonds

 ;

Legal Tender? The Regulation of Cryptocurrencies

Cryptocurrencies will never become legal tender

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Demystifying Crypto: Digital Assets and the Role of Government

 

Cryptocurrencies not recognised as legal tender in Malaysia, says deputy minister

 ‘Cryptocurrencies not recognised as legal tender’ 

Useful assets:Although digital assets are not recognised as legal tender, Yamani added it still has many different usage including as a class asset that can be invested in

 

Cryptocurrencies are still not recognised as legal tender in Malaysia as they do not exhibit characteristics of universal money, says Deputy Finance Minister II Yamani Hafez Musa.

Yamani said cryptocurrencies, also known as digital assets, are also not a payment instrument that is regulated by Bank Negara.
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“Digital assets such as bitcoin and Ethereum are not suitable to be used as a payment instrument as these assets do not exhibit characteristics of money.
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“In general, digital assets are not a store of value and a good medium of exchange.
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“This is due to the state of digital assets which is exposed to volatility as a result of speculative investments,” he said when replying to a question raised by Nurul Izzah Anwar (PH - Permatang Pauh) in Dewan Rakyat on Thursday (March 3).
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Nurul Izzah had asked about the government’s role in monitoring and regulating currency as well as cryptocurrency assets.
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She also asked if the government had any plans to create digital currency taking into account Bank Negara’s involvement in Project Dunbar for international money transfers using blockchain technology.
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In explaining the volatility of cryptocurrency, Yamani said bitcoin hit a peak of US$65,000 (RM272,382.50) in April 2021 but quickly saw a decline of 50% the following week.
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He also said cryptocurrency is exposed to the risk of theft in which statistics from 2011 to 2021 showed that digital assets worth US$12bil (RM50.29bil) have been stolen through cyberattacks and hacking.
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He added that bitcoin is also only able to process 10 transactions per second compared to 65,000 transactions per second on current payment systems such as Visa.
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“Also, what is important is the huge impact on the environment because the electrical power that is used to process one bitcoin transaction can process 1.2 milliob visa transactions.
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In 2020, the bitcoin network used 132 terra-watts per hour which is equivalent to the entire electricity consumption of Argentina,” he said.
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Yamani added that currently, Bank Negara has also not decided to issue a central bank digital currency (CBDC) as the country’s domestic payment systems including the Real-time Retail Payments Platform continues to operate safely and efficiently to support Malaysia’s economic needs and allows real-time digital payments.
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“Additionally, the monetary policy tools and existing finances also remain effective in maintaining monetary stability and the country’s finances,” he said.
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Although digital assets are not recognised as legal tender, Yamani added it still has many different usage including as a class asset that can be invested in.
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As such, he said the Securities Commission (SC) as the market regulator has set digital assets as a security under the law and is responsible to regulate its trading activities.- 

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China's new digital currency

 

 On Mcoin, Bitcoin and points of investment 

 

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 China's Bitcoin trading plunges to 10% of global share from 90%: central bank

China's Bitcoin trading has plunged to 10 percent of global share from 90 percent, and the country has effectively curbed the speculation of crypto currency trading as part of an effortto fend off domesticfinancial risks and restore financial order, the central bank said on Thursday.

Tuesday 3 December 2019

More heartaches than happiness

Many investors get their fingers burned in dubious money-making schemes

M Mall in Penang where MBI investors can exchange their virtual coins is now almost deserted.

IT may seem like it was not so long ago that money-game was practically on everybody’s lips especially here in Penang,

My close friend even invested in MBI Group International which was one of the most popular investment schemes then.

At its peak, one would be considered the odd one out for not investing in the scheme.

How times have changed. Now, my friend is telling me that he has not heard from his upline for months.

It was a far cry from the time when the upline would tell him how good the scheme was, and even spell out a time frame to cash in on the investments.

Most investors have now resigned to the fact that their investments are as good as gone. They feel ashamed to lodge police reports and many just suffer in silence for fear of people teasing them.

However, their counterparts from China were less forgiving.

In October, hundreds of them staged a peaceful protest near the Chinese Embassy in Kuala Lumpur. Wailing and sobbing, they urged the Chinese government to help them recover the hundreds of million ringgit they had invested in the Penang-based company.

In Penang, several groups of Chinese investors also vented their frustration at a hotel and the jetty of an island resort here, where both properties are said to be associated with the company.

The last we heard, three of them even went to the extent of dropping fake bombs at a house in Bukit Gambier out of desperation.

The house belongs to the son of MBI Group International founder Tedy Teow. Luckily, no untoward incidents took place.

Another friend of mine told me that he started believing in karma after putting faith in the money- game.

He is now convinced that what goes around, comes around. This is his story.

He put in a sum of money in BTC I-system, a scheme which claimed to invest in bitcoin digital currency.

Without even knowing how the investment works, he managed to get back his capital within two months, plus a few thousand of ringgits extra in the next few months. Then the scheme collapsed.

He then took the plunge again in another scheme. He was confident of easy money again, especially after being told he was among the first few to join the investment. He was not so lucky this time.

The profit that he got in the first investment ended up paying for the second scheme that went bust.

I have seen many people whose relationship with family members had become strained all because of these dubious schemes.

Direct Selling Association of Malaysia (DSAM) president Datuk Tan Chong Guan reminded the public that there is no free lunch in this world.

“Where there is no sales but a return is promised on investments, this is a sign that it is a money-game, or a pyramid scheme, ” he was quoted then.

If you still could not figure out or get a clear explanation on how the investment will make money, then you better opt out.

If it involves any chain-recruitment that offers commissions for bringing in new affiliates, or sophisticated or complicated investment schemes that sound too alien, then you better avoid it.

Always remember that one has to work hard to earn one’s keep.

But believe me, money-game would always re-emerge in other forms, just like the online scams as long as there is human greed.

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Related posts:

Malaysian authorities crack down on virtual money operator, MBI Group International

https://youtu.be/zzn4zLtw_p8

Smooth operation: Domestic Trade, Co-operatives and Consumerism Ministry enforcement director Datuk Mohd Roslan Mahayudin (centre) giving a press conference on the raids which yielded luxury vehicles and cash. Despite the crackdown by the authorities, investors continue to patronise M Mall, which is operated by MBI.

Dawn raids on MBI

Key member of MBI Group International remanded 98 bank accounts containing RM209mil frozen to date Three luxury cars and cash seized

Two virtual coin get-rich schemes red-flagged by Malaysian Central Bank



Read more


Friday 22 November 2019

Blockchain: Internet of Value/ Currency of Trust; Private cryptocurrency a misallocation among blockchain technology, say research & economist



  • Blockchain embodies the internet of value. How will it revolutionize our lives and our pockets?

  •  And, we look at the qualities Blockchain needs to spark mass adoption.


https://youtu.be/oJGVvJS0A0I

Blockchain, one of the buzzwords in technology, is set to rise in China. Recently, Chinese President Xi Jinping underscored the fledgling technology as the country increasingly views Blockchain as key to future innovation. Has a digital game changer arrived? How will a boom in Blockchain impact our lives? Today we delve into the world of the new technology and talk to Don Tapscott, co-founder and executive chairman of the Blockchain Research Institute, to find out more.

https://youtu.be/DCLqWpXFE2o

Currency of Trust


Blockchain has the potential to be revolutionary. But, what hurdles must it overcome before it can hit the mainstream? In London, we invited Patrick McCorry, founder and CEO of PISA Research, a grant funded by a group of Blockchain companies, to decode this ever-changing world.

https://youtu.be/A2IDapvfUTM



https://youtu.be/41hPRCnUCtI

https://youtu.be/8H-pJ9hs9I4


Private cryptocurrency a misallocation among blockchain technology, says economist

Cryptocurrency is digital-based cash among the internet world nowadays. Born from blockchain, this kind of "currency" is blooming in terms of high privacy. Acknowledging that, Nobel Prize-winning economist and Harvard professor Eric Maskin commented that private cryptocurrency is a misallocation.

"The most important application of blockchain so far has been cryptocurrency, and that is a terrible misallocation. In my view, cryptocurrency, at least private cryptocurrency like bitcoin is a mistake," said Maskin.

"Because the public currency like RMB and U.S. dollar are much more useful than private currency. [Public currencies] they preserve the power of central banks to conduct monetary policy. If no one is using the dollar, then the U.S. monetary policy is useless. So I'm worried about cryptocurrency only to the extent that it reduces the use of currencies like RMB or dollar," he added.

He also pointed out that cryptocurrencies could interfere with central banks' monetary policies.

Meanwhile, Maskin supports the idea that blockchain is a technology. He noted that it is one of the exciting developments that have come along in recent years.

"Blockchain can make all sorts of transactions much easier and much more secure. It can also ensure that only the information that people need to have gets transmitted," said Maskin.

"Blockchain is a way for me to guarantee that only what you need to about me gets told. And that's valuable in a world where we're beginning to worry about privacy issues," the professor explained.

Besides, Maskin supports building the country's own digital currencies. With the backdrop of e-payment booming around the world, Maskin said the digital currency can make transaction easier but it won't have all of the unpleasant side effects of these private currencies.

Source link


Read more:

Blockchain with Chinese characteristics





Tuesday 5 November 2019

China gets into blockchain race with US



Blockchain is perhaps best known for underpinning the operation of cryptocurrencies such as bitcoin, which Beijing may seek to replicate.PHOTO: REUTERS
One example of the potential application of blockchain technology is a newly launched app by the Communist Party that asks members to explain why they joined and what party loyalty means to them. (Photo: AFP/Greg Baker)

BEIJING: China has launched an ambitious effort to challenge the US dominance in blockchain technology, which it could use for everything from issuing digital money, to streamlining a raft of government services and tracking Communist Party loyalty.

The technology received a crucial endorsement from President Xi Jinping last week, a signal that the government sees blockchain as an integral part of the country's plan to become a high-tech superpower.

Beijing is the latest in a handful of countries to have adopted a law strictly governing the encryption of data - particularly blockchain technology, which allows the storage and direct exchange of data without going through an intermediary.

Reputedly unfalsifiable, blockchain is a database shared across a network of computers. Once a record has been added to the chain it is almost impossible to change.

It is perhaps best known for underpinning the operation of cryptocurrencies such as bitcoin - which Beijing may seek to replicate as it pushes ahead with its plans for a world-leading government-run digital currency.

https://cna-sg-res.cloudinary.com/image/upload/q_auto,f_auto/image/12059024/16x9/670/377/9e6b6b9b2b6ec007ae2c9a3107f86991/tI/blockchain-technology-received-a-crucial-endorsement-from-president-xi-jinping-last-week-a-signal-that-the-government-sees-it-as-an-integral-part-of-the-country-s-plan-to-become-a-high-tech-superpower-1572750315390-2.jpg
Blockchain technology received a crucial endorsement from President Xi Jinping last week, a signal
Blockchain technology received a crucial endorsement from President Xi Jinping last week, a signalBlockchain technology received a crucial endorsement from President Xi Jinping last week, a signal that the government sees it as an integral part of the country's plan to become a high-tech superpower. (Photo: AFP/Andrew Caballero-Reynolds)

Although the new law for blockchain "is still rather vague", the country is clearly one of the most active in terms of regulation, Stanislas Pogorzelski, editor of specialist site Cryptonaute.fr, told AFP.

"China has understood very well that to stay a superpower, you have to be at the forefront of new technologies," said Pogorzelski.

Blockchain is set to play a key role in many sectors in the future, including digital finance, internet of things, artificial intelligence and 5G.

LESS HUMAN INTERVENTION 

Bitcoin(FX:BTC/USD)Stock market insights from social media
Updated https://sentifi.com/currencies/bitcoin
It could also serve to make China's vast bureaucratic system more efficient.

The official Xinhua news agency said a blockchain-based system had been used for the first time to automatically generate and file an enforcement case in Chinese court against a party who failed to pay damages in a mediation agreement.

With less human intervention, such systems could make judicial enforcement in China "more intelligent and transparent," the agency said.

Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said China should step up research and development of the technology.

"Blockchain should play a bigger role in strengthening Chinese power in cyberspace, developing the digital economy and promoting socio-economic development," Xi said.

"The general sentiment of Xi's comments was simple," said Anthony Pompliano, who writes a daily cryptocurrency newsletter.

"Blockchain technology is really important for the future and China plans to be the global leader," Pompliano added.

LOYALTY TEST

According to analyst Kai von Carnap of the Mercator Institute for Chinese Studies, blockchain-backed tools have potential applications that go well beyond improving administrative efficiency in China.

"More interesting will be those targeting party discipline, internal stability and ideological loyalty," Von Carnap told AFP.
Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said
Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said
 https://cna-sg-res.cloudinary.com/image/upload/q_auto,f_auto/image/12059022/16x9/670/377/4fa319d4c8e8c12060091d197dfd0249/sF/chinese-shares-jumped-this-week-as-investors-piled-into-stocks-linked-to-blockchain-after-xi-said-china-should-step-up-research-and-development-of-the-technology-1572750315390-3.jpg
Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said China should step up research and development of the technology. (Photo: AFP/Hector Retamal)

One example is a newly launched app by the Communist Party that asks members to explain why they joined and what party loyalty means to them.

Blockchain technology is then used to store their responses on a permanent, widely distributed ledger - recording their thoughts in cyberspace forever.

"NOT A FAN"

As China trumpets its push for more blockchain technology, it is hoping to outpace trade-war rival the United States, whose President Donald Trump tweeted his disdain for cryptocurrencies in July.

"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air," he wrote.

The contrast between the world's two biggest economies is "striking", according to Pompliano, who says "bitcoin, blockchain technology, and digital assets are not a priority for America".

Facebook chief executive Mark Zuckerberg had to defend his plans to launch a digital coin called Libra to the US Congress in October, after it faced a torrent of criticism from all sides - including governments who see it as a threat to their monetary sovereignty.

"I don't think Libra will succeed," Huang Qifan, vice director of the CCIEE, an economic think-tank that advises Beijing, said this week in remarks widely reported by state media.

"It is better ... to have sovereign digital currencies issued by a government or a central bank," he said.

Last year China released a damning report on existing digital currencies, saying they were "increasingly used as a tool in criminal activities."

But while Beijing banned cryptocurrencies two years ago, it is fast-tracking preparations for its own state-run virtual currency, which is supposed to facilitate transactions and reduce costs.

The anonymity of cryptocurrencies allows users to buy and sell freely without leaving a digital trail - but China's mooted e-cash system will be tightly regulated, experts say, and run by the People's Bank of China.

Source: AFP/zl   Source link

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Blockchain endorsement : Xi said China will increase investment in blockchain technology after chairing a study session last week on d.

What is Blockchain Technology, its uses and applications?

 

BLOCKCHAIN beyond Bitcoin

Friday 1 November 2019

President Xi’s Blockchain Push Triggers Frenzy in China Technology Stocks

Blockchain endorsement: Xi said China will increase investment in blockchain technology after chairing a study session last week on developing the industry, state-owned Xinhua reported.— AP
 
https://youtu.be/hfNcct7ZfbE

https://youtu.be/KoDD2Yk0bjE
  • Shenzhen tech index surges 5.3%, the most in eight months
  • Investors urge companies to develop blockchain businesses
BEIJING: Chinese investors snapped up every blockchain-related stock in sight after President Xi Jinping said Beijing wants to speed up development of the technology.

The gains were widespread yesterday, with Insigma Technology Co and Sinodata Co among more than 60 tech shares surging by the daily limit in Shanghai and Shenzhen.

The excitement coincided with a 26% rally in Bitcoin, and also boosted stocks with more tenuous connections to blockchain, like baby-food producer Beingmate Co and selfie-app developer Meitu Inc.

Xi said China will increase investment in blockchain technology after chairing a study session last week on developing the industry, state-owned Xinhua reported late last Friday.

The market reaction shows how far an endorsement from Xi can go in China, where high-level officials yesterday began their first major policy meeting since early 2018.

“Most of these companies, especially those that are just beginning to state their connection with blockchain today, are trying to take advantage of the hype, ” said Li Shiyu, fund manager at Guangdong Xiaoyu Investment Management Co. “It shows how much excitement can be triggered by something stressed as a priority by the top man himself.”

Xi Jinping comments spark rally in China technology stocks

The Shenzhen Information Technology Index closed 5.3% higher yesterday, its biggest advance in eight months.

Hundsun Technologies Inc, Easysight Supply Chain Management Co, YGSOFT Inc and dozens more companies with officially registered blockchain businesses rose by the 10% limit.

In Hong Kong, traders singled out Meitu due to its plans for an encrypted user-identification system.

The shares surged as much as 30%. Pantronics Holdings Ltd - which earlier this month said it will change its name to “Huobi Technology”, a reference to a digital currency exchange - rallied as much as 67%.

American depositary receipts of Chinese blockchain companies also surged last Friday.

Investors pressured other firms to jump on the blockchain hype, using an online Q&A platform to submit thousands of questions on their plans to use the technology.

“Please proactively make expansion plans in blockchain to jump on state policies - doing so would be the best reward to investors, ” urged one shareholder of development-store operator Hunan Friendship & Apollo Commercial Co. — Bloomberg

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Thursday 27 June 2019

Facebook, Libra coin plan

Cryptocurrency and Facebook logo are seen together in this photo. Photo: IC 
https://youtu.be/eAPLA4oy7Ks

Experts raise concerns over privacy and regulation

Facebook unveiled plans Tuesday for a new global cryptocurrency called Libra, pledging to deliver stable virtual money that lives on smartphones and could bring over a billion "unbanked" people into the financial system.

The Libra coin plan, backed by financial and nonprofit partners, represents an ambitious new initiative for the world's biggest social network with the potential to bring crypto-money out of the shadows and into the mainstream.

Facebook and some two dozen partners released a prototype of Libra as an open source code for developers interested in weaving it into apps, services or businesses ahead of a rollout as global digital money next year.

The nonprofit Libra Association based in Geneva will oversee the blockchain-based coin, maintaining a real-world asset reserve to keep its value stable.

The Libra Association's Dante Disparte said it could offer online commerce and financial services at minimal cost to more than a billion "unbanked" people - adults without bank accounts or those who use services outside the banking system such as payday loans to make ends meet.

"We believe if you give people access to money and opportunity at the lowest cost, the way the internet itself did in the past with information, you can create a lot more stability than we have had up until now," Disparte, head of policy and communications, told AFP.

Facebook will be just one voice among many in the association, but is separately building a digital wallet called Calibra.

"We view this as a complement to Facebook's mission to connect people wherever they are; that includes allowing them to exchange value," Calibra vice president of operations Tomer Barel told AFP.

"Many people who use Facebook are in countries where there are barriers to banking or credit."

But the move raised questions about how such a new money would be regulated, with one lawmaker calling for a pause on Libra.

"Given the company's troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues," said Maxine Waters, chair of the financial services committee in the US House of Representatives.

Meanwhile French Finance Minister Bruno le Maire said such digital money could never replace sovereign currencies.

"The aspect of sovereignty must stay in the hands of states and not private companies which respond to private interests," Le Maire told Europe 1 radio.

Bank of England Governor Mark Carney said Facebook's new currency would have to withstand scrutiny of its operational resilience and not allow itself to be used for money laundering or terror financing.

ING economists Teunis Brosens and Carlo Cocuzzo said in a research note it was not clear what Libra was or how it might be overseen while US Senator Sherrod Brown, a Democrat and banking committee member, voiced concerns over Facebook's checkered record on protecting users' privacy.

Backed by real cash

Libra Association debuted with 28 members including Mastercard, Visa, Stripe, Kiva, PayPal, Lyft, Uber and Women's World Banking.

Calibra is being built into Facebook's Messenger and WhatsApp with a goal of letting users send Libra as easily as they might fire off a text message.

Libra learned from the many other cryptocurrencies that have preceded it such as bitcoin and is designed to avoid the roller-coaster valuations that have attracted speculation and caused ruin.

Real-world currency will go into a reserve backing the digital money, the value of which will mirror stable currencies such as the US dollar and the euro, according to its creators.

"It is backed by a reserve of assets that ensures utility and low volatility," Barel said.

The Libra Association will be the only entity able to "mint or burn" the digital currency, maintaining supply in tune with demand and assets in reserve, according to Barel.

"It is not about trusting Facebook, it is effectively trust in the association's founding organizations that this is independent and democratic," Disparte said.

New directions

The launch comes with Facebook seeking to move past a series of lapses on privacy and data protection that have tarnished its image and sparked scrutiny from regulators around the world.

Chief executive Mark Zuckerberg has promised a new direction for Facebook built around smaller groups, private messaging and payments.

The new Calibra digital wallet promises eventually to give Facebook opportunities to build financial services into its offerings, offer to expand its own commerce and let more small businesses buy ads on the social network.

"We certainly see long-term value for Facebook," Barel said.

Facebook said it would not make any money through Libra or Calibra, but rather was seeking to "drive adoption and scale" before exploring ways to monetize the new system.

Financial information at Calibra will be kept strictly separate from social data on Facebook and won't be used to target ads, Calibra vice president of product Kevin Weil told AFP.

Libra will be a regulated currency, subject to local laws in markets regarding fraud, guarding against money laundering and more, Weil said.

'Watershed' moment?

According to Facebook and its partners, local currencies and Libra may be swapped at currency exchange houses or other businesses.

And the ubiquity of smartphones means digital wallets for Libra could make banking and credit card services and e-commerce available in places where they don't now exist.

Analyst and cryptocurrency investor Lou Kerner said Facebook's move has the potential to open the door for cryptocurrency to a wider public.

"What Facebook is really good at, is making things really simple to use," Kerner told AFP.

"And that's what is super exciting for the crypto industry, is somebody comes along who understands user experience and has billions of users that they can roll this out to."

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