Facebook’s libra could disrupt collateral markets – IMF paper

Collateral used to back ‘stablecoins’ such as libra will be unavailable for reuse

Facebook libra

Plans by Facebook and other private companies to issue so-called stablecoins backed by government securities could disrupt the supply of collateral to financial markets, says a new working paper from the International Monetary Fund. 

In the IMF working paper, called Privacy provision, payment latency and role of collateral, authors Charles Kahn, Caitlin Long and Manmohan Singh argue that digital currencies are analogous to collateral reuse, where securities are exchanged for cash. Looked at

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