Big techs may disrupt European financial system, ECB warns
Planned cryptocurrencies issued by global tech giants like Facebook might disrupt the European financial system, a European Central Bank board member warned Friday.
"Big techs may pose considerable risks from an economic and social perspective and they may restrict, rather than expand, consumer choice," said Fabio Panetta, who sits on the ECB's executive board.
"While they could offer convenient and efficient payment solutions," Panetta said, "they also risk endangering competition, privacy, financial stability and even monetary sovereignty." Pancetta's warning came as the coronavirus pandemic accelerates a shift towards cashless and digital payments, which the ECB director believes is likely to persist once the health crisis is over.
Facebook has been looking into creating its own cryptocurrencyknown as a stablecoin-called Libra, which it touts as a way to lower costs for consumers around the world, eliminating the high fees of crossborder transfers. But the plan has caused controversy and worried global regulators who expressed concern of a privately-run currency.
Stablecoins could mean money is reduced to a "club good", offered in return for membership fees to a platform, Panetta said. Europe should also avoid dependence on foreign providers for cashless payments that would "harm competition", he added.
The ECB is currently undergoing a public consultation on whether to adopt a digital currency. Panetta has previously expressed support for a digital euro as a way of reinforcing financial sovereignty of the European Union. In September, the European Commission unveiled plans to regulate cryptocurrencies, proposing rules that could limit the development of Libra and similar projects.
"No global asset-backed cryptoasset arrangement should begin operation in the EU until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed," they said.
The ECB "is the only one to be allowed to issue a currency," French Finance Minister Bruno Le Maire previously said. It's been a rough year for Black-owned small businesses in the United States, and the latest surge in coronavirus cases suggests a festive season without much celebration.
"Black Friday" normally kicks off the holiday shopping season the morning after Thanksgiving. But rising coronavirus cases have prompted fresh restrictions in Los Angeles and elsewhere. The new rules mean
Hotville Chicken, a south Los Angeles restaurant specializing in "Nashville-style" spicy dishes, will have to shut its outdoor eating space after already closing the dining room.
"It's going to hurt," said owner Kim Prince, who expects the business should pull through with pickup and delivery. Many stores like "One of a Kind Hats" are still open, but struggling. "It's really slow," said owner Meeka Robinson Davis, who estimates sales of her custom-made hats are down about 70 percent because her cliental no longer needs items for church, weddings or other gatherings.
At least three businesses on Davis' block have shuttered as she turns to personal savings and grant funds to stay afloat. Between March 1 and August 31, 163,735 businesses on Yelp closed across the US, with about 60pc permanently shut, the website said in September. Non-white businesses have been hit harder. An August Federal Reserve of New York paper said the number of Black small businesses fell by 41 compared with a 17 percent drop in white-owned businesses.
Factors behind this difference include the more severe health toll of coronavirus among communities of color and weaker banking relationships that positioned Black companies unfavorably for federal small business supports, according to Fed paper.