Facebook’s (NASDAQ:FB) cryptocurrency plans pose risks to the international banking system, an organisation which represents the world’s central banks has warned. The comments come after the social media giant unveiled plans last week to launch a digital currency called Libra.
Facebook’s share price rose on Friday, gaining 0.85 percent to close at $191.14. The shares have given up more than five percent of their value over the past year.
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BIS flags FB digital currency concerns
The Bank for International Settlements (BIS) warned in a statement over the weekend that the entry of large technology firms such as Alibaba, Amazon, Facebook, Google and Tencent into financial services introduced new risks.
“The role of big techs in finance raises issues that go beyond traditional financial risks,” the BIS warned, adding that regulators needed “to ensure a level playing field, taking into account big techs’ wide customer bases and particular business models”. The warning came in an excerpt from the banking body’s upcoming Annual Economic Report.
The update comes just days after Facebook announced plans to introduce is a digital wallet for Libra, a new global currency powered by blockchain technology. The wallet will be available in Messenger, WhatsApp and as a standalone app, and is expected to launch next year.
The Guardian meanwhile noted that the Bank of England had cautiously welcomed the advent of digital currencies, saying it would not develop its own but rely on tight regulation of private sector initiatives.
Analysts on social media company
Royal Bank of Canada, which rates the tech giant as a ‘buy,’ set a target on the Facebook share price of $250p last week, while JPMorgan Chase & Co, which is also bullish on the company with a ‘buy’ rating, placed a valuation of $245p. According to MarketBeat, Facebook currently has a consensus ‘buy’ rating and an average price target of $211.4098p.