The Rise and Fall of Facebook Libra

The Rise and Fall of Facebook Libra Etienne Kiss-Borlase

Facebook Libra has been in the news a lot lately. This cryptocurrency was envisioned as a so-called stablecoin. Libra was designed carefully to avoid the huge fluctuations faced by cryptocurrencies like Bitcoin. The plan was to offer a more stable currency, backed by stable securities. Sponsors like Visa, MasterCard, and PayPal seemed just about ready to get on board with the project.

 

However, by late October, they had all pulled their backing off the table. eBay, Stripe, and Mercado Pago were other potential sponsors who didn’t quite come through. Why the loss of confidence? Many aspects of Libra have been too up in the air for too long. In particular, Facebook’s role in the project opened it up to special concerns.

 

Facebook was famously always the social network that required real names. With Libra, if they offered anonymity, it could create liabilities. The platform could attract lots of black market activity and scams. However, if Libra were too closely linked to people’s Facebook profiles, it could cause problems in terms of privacy issues. The social network has alarmed consumers when it comes to data already.

 

Asking Facebook’s end users for access to financial details could really increase their risk exposure. If the two services were too closely linked, any data breach to either network could prove devastating for everyone involved. The idea of the low-volatility securities backing the stablecoin also seems overly optimistic in the wake of the 2008 recession.

 

Perhaps most importantly, Facebook is already facing calls for increased regulation. These are coming from powerful political figures, including candidates for the US Presidency like Elizabeth Warren. Entering the world of currency will almost definitely lead to more government scrutiny. For one thing, governments need a stable currency and don’t want people to use an alternative that undermines theirs. For another, Facebook has already been implicated in election tampering.

 

Critics of Libra point out that there are already better ways to do many of the things Facebook claims this currency will solve. Solutions like Ripple follow the rules set in place by the federal government. They’re already used to facilitate payments internationally at reasonable costs. There seems to be no real way that Libra would do the same thing at a lower cost, or with more efficiency.

This article was originally published on EtienneKiss-Borlase.net

The Rise and Fall of Facebook Libra

Geneva Announces First Ever Strategic Economic Plan

Geneva is known for having one of the highest densities of millionaires per capita in the world. But recently, it has been running a budget deficit, and it’s having a hard time keeping up with the growing strength of the Swiss franc, making many companies reconsider the area as their European headquarters.

In January, the Swiss central bank surprised everyone by eliminating its currency cap with the euro, boosting the franc by 21 per cent. Almost a year before that, a popular vote lead to new measures aimed at stopping mass immigration. Couple these events with the European Union forcing Switzerland to get rid of its preferential tax rates for foreign firms, and you’re left with a lot of upheaval that has compromised the political and economic stability that once enticed hundreds of multinational companies to headquarter themselves in Geneva.

The local government is now looking for new ways to attract millionaires and multinational companies. Just four years after Geneva said it was running out of room for hedge funds, the canton has announced that it is developing its first ever strategic economic plan.

Part of re-creating stability in the area will be accelerating the tax reform process. Geneva is already lagging behind neighboring canton Vaud in regards to implementing tax reforms set forth by the EU. Vaud has already proposed a new corporate rate of 13.8 percent.

The implementation of these reforms will have their own repercussions, namely that they will increase the deficit which is already expected to hit 200 million francs ($207 million) for 2015. Many worry that if Geneva doesn’t find a way to lower their tax rates, there could be a mass exodus, and consequently, more instability in the area.

In 2014, 35 foreign companies set up shop in Geneva. While that’s up from the 30 companies that arrived in 2013, last year’s companies only created 170 jobs, and of those jobs created, most are executive level. One of the biggest draws for new companies is the executive level talent that Geneva has to offer. With so many successful companies headquartering in the same town, it’s easy to see why companies in need of experienced management would want to get their head in the game.

While some are worried about the future of Geneva, it’s important to keep in mind that Geneva is still ranking third worldwide for the density of millionaires per capita in 2015, trailing behind only Zurich and Monaco.

This post was originally published on Etienne Kiss-Borlase’s Finance blog. For more info about Etienne, please visit his homepage.

Geneva Announces First Ever Strategic Economic Plan

Swiss Market Finished On A High Note

This past weeks market gain in the Swiss Stock Market is seeing a modest increase after last weeks solid performance. The United States increased employment rate has helped the market in Switzerland drastically. Nasdaq explained, “The overall attitude among investors remained one of caution Monday, due to concerns over Greece. Eurozone finance ministers are meeting in Brussels today to take note of the Greek government’s progress in the implementation of structural reforms in exchange for bailout funds. It was reported just before the close that the Greek government has “executed” the order to make a scheduled loan repayment of 750 million euro to the International Monetary Fund tomorrow.” 

This past week, the Swiss Market Index rose .26% and finished at 9,117.33. This is some the highest values in this fiscal year. Shares across the whole market have improved drastically.

Nasdaq explained, “Shares of UBS began trading ex-dividend on Monday and ended the session higher by 0.1 percent. Credit Suisse climbed by 1.2 percent and Julius Baer added 0.6 percent.”

This post was originally published on Etienne Kiss-Borlase’s Finance blog. For more info about Etienne, please visit his homepage.

Swiss Market Finished On A High Note