fbpx
The Daily Chain
No Result
View All Result
  • News
    • All News
    • Assets
    • Bitcoin
    • Business
    • Editor’s Picks
    • Technology
  • Markets
    • Market Updates
    • Live Cryptocurrency Market Prices
    • Press Release
  • Features
    • Articles
    • Opinion
    • Interviews
    • Quiz
  • Education
    • Blockchain
    • Trading
    • Investing
    • Safety
  • Media
    • Video
    • Podcasts
  • Reviews
  • Asset List
  • News
    • All News
    • Assets
    • Bitcoin
    • Business
    • Editor’s Picks
    • Technology
  • Markets
    • Market Updates
    • Live Cryptocurrency Market Prices
    • Press Release
  • Features
    • Articles
    • Opinion
    • Interviews
    • Quiz
  • Education
    • Blockchain
    • Trading
    • Investing
    • Safety
  • Media
    • Video
    • Podcasts
  • Reviews
  • Asset List
No Result
View All Result
The Daily Chain
No Result
View All Result
Home All News

Stablecoins Like Libra May not be Ready for the Big Leagues – JPMorgan Analyst

Darryn Pollock by Darryn Pollock
6th September 2019
3 min read
1
Bitwise Strikes Back Against SEC: Outlines Bitcoin’s Regulatory Progress
1
SHARES
0
VIEWS
FacebookTwitterLinkedinTelegramEmailWhatsapp

It is no longer just the central banks and the regulators who are starting to pick apart Facebook’s Libra coin project. Now, analysts from JPMorgan have suggested that the new swath of stablecoins entering the market could be prone to failure brought on by popularity. 

The concern is, especially for a coin like Libra, that if some 2 billion users under Facebook’s wing decided to pile into the Stablecoin and ramp up the transactions from day one, they would lack the short-term liquidity of other payments systems. Usage could grow faster than the network can safely support.

It is a double-edged sword because Stablecoins are being viewed more and more as a useful and powerful alternative to other forms of digital payments; partly through their legitimization from the likes of JPMorgan and Facebook, but also because of the adoption of cryptocurrency.

However, the technology on some of these networks may not yet be ready to tackle that kind of popularity or the numbers that some stablecoin projects are anticipating. JPMorgan’s analysts are now stressing the need for network responsibility. 

“Stablecoins, and Libra in particular, have the potential to grow substantially and ultimately shoulder a significant fraction of global transactional activity,” the analysts said in a note. 

“However, as currently designed and proposed, they do not take into account the microstructure of operating such a payment system. The risk of payment system gridlock, particularly during periods of stress, could have serious macroeconomic consequences.”

This is a fair concern coming from analysts, and it is one predicated on the network potential and capacity of the new coin rather than external factors like regulations. More so, there is another danger that has been pointed out – negative yields.

Libra relies on the income from collateral in the reserve account – which will be fiat currencies – to pay for maintaining the network and rewarding association members. Yet yields on most major currencies are negative yields.

“Any system that relies on reserve-asset income to fund operational and other ongoing costs becomes unstable in a negative yield world,” added the analysts. “With more than half of high-quality short-term sovereign debt already negative, the vast majority of the remainder made up of U.S. government securities, and trends pointing towards global monetary easing, a fully negative-yielding Libra reserve has become a plausible (some would argue likely) risk.”

It appears as if the road to fruition for Libra is still a long one. Not only are the regulators getting in the way, but there are also real concerns about the running of such an extensive network, and trying to get it off the ground.

It is still essential, and sound, to have these concerns aired before such a significant endeavor is undertaken, especially by a company that has a poor reputation already, and not the most established cryptocurrency presence. 

Tags: JPMorganLibrastablecoin
Share1TweetShareShareSendSend
Darryn Pollock

Darryn Pollock

Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

Related Posts

Crypto Expert Advises Investors to Scoop up Altcoins as BTC Rally Stalls
All News

Crypto Expert Advises Investors to Scoop up Altcoins as BTC Rally Stalls

22nd January 2021
30 in Japan Face Charges After Trading Stolen Crypto from Coincheck
All News

30 in Japan Face Charges After Trading Stolen Crypto from Coincheck

22nd January 2021
VanEck Files for Digital Asset ETF that will Favour Investors
All News

VanEck Files for Digital Asset ETF that will Favour Investors

22nd January 2021
Yellen-Crypto
All News

Joe Biden’s Treasury Secretary nominee says Crypto can empower Financial Systems days after she criticized the tech

22nd January 2021
Ripple and Binance Transact 51.4 Million XRP Worth About $13M
All News

Ripple and Binance Transact 51.4 Million XRP Worth About $13M

22nd January 2021
Bitcoin-Chamath Palihapitiya
All News

Bitcoin Briefly Breaks Below $30,000 But Rebounds on Microstrategy Dip Buy

22nd January 2021
Next Post
Japanese Messaging Giant Gets Thumbs Up for Crypto Exchange Licence

Japanese Messaging Giant Line Gets Thumbs Up for Crypto Exchange Licence

Komodo’s Long-Anticipated AtomicDEX Enters Public Beta

Komodo's Long-Anticipated AtomicDEX Enters Public Beta

Please login to join discussion
  • All News
  • Editor's Picks

Crypto Expert Advises Investors to Scoop up Altcoins as BTC Rally Stalls

30 in Japan Face Charges After Trading Stolen Crypto from Coincheck

VanEck Files for Digital Asset ETF that will Favour Investors

Joe Biden’s Treasury Secretary nominee says Crypto can empower Financial Systems days after she criticized the tech

Ripple and Binance Transact 51.4 Million XRP Worth About $13M

Join our newsletter!

Enter your email to receive our newsletter.


Don’t worry, we don’t spam
ADVERTISEMENT

Popular Posts

  • Prime Minister-Bitcoin-Canada

    Ex Canadian Prime Ministers says Bitcoin could be a Reserve Currency

    0 shares
    Share 0 Tweet 0
  • Reports – Iranian police seize 45,000 illegal Bitcoin miners

    0 shares
    Share 0 Tweet 0
  • SEC lists 28 Suspicious Crypto Companies in its Watch List – Are your funds safe?

    0 shares
    Share 0 Tweet 0
  • Ether Primed To Give Bitcoin a Run For Its Market Dominance

    0 shares
    Share 0 Tweet 0
  • Ongoing BTC Consolidation Could Prove Incredibly Bullish For Altcoins

    0 shares
    Share 0 Tweet 0

Market Updates

Crypto Expert Advises Investors to Scoop up Altcoins as BTC Rally Stalls

Crypto Expert Advises Investors to Scoop up Altcoins as BTC Rally Stalls

22nd January 2021
Ether Primed To Give Bitcoin a Run For Its Market Dominance

Ether Primed To Give Bitcoin a Run For Its Market Dominance

21st January 2021
ETH Surpasses Its 2018 Price Record to Set New ATH at $1,439

ETH Surpasses Its 2018 Price Record to Set New ATH at $1,439

19th January 2021

Media

hashoshi-alts (2)

Altcoin Season Picks / Projects with Huge Potential

9th September 2020
cardano-ADA

Hashoshi: Cardano Shelley is live… but what’s next is WAY BIGGER

19th August 2020
hashoshi-alts

Hashoshi: Low Cap Alts you need to be watching in 2020

5th August 2020
fomohunt-podcast

FomoHunt Podcast – Joe Vezz & Jon Farjo: Tracking Social Sentiment Waves with Lunar Crush

30th July 2020
ethereum-hashoshi

Hashoshi: Ethereum 2.0, Chainlink, Bitcoin Price, and more!

27th July 2020
fomohunt-podcast

FomoHunt Podcast – Joe Roets: Behind the scenes of “Open source money”

24th July 2020
The Daily Chain

The Daily Chain is a news platform and educational hub founded in January 2019. We are dedicated to providing unique and informative daily content across all facets of the blockchain and cryptocurrency industry whether it be news, opinion pieces, technical analysis, reviews, interviews, podcasts and more.

LEARN MORE »

Recent Posts

  • Crypto Expert Advises Investors to Scoop up Altcoins as BTC Rally Stalls
  • 30 in Japan Face Charges After Trading Stolen Crypto from Coincheck
  • VanEck Files for Digital Asset ETF that will Favour Investors
  • Joe Biden’s Treasury Secretary nominee says Crypto can empower Financial Systems days after she criticized the tech

Information

  • About
  • Contact
  • Site notice
  • Risk Warning
  • Privacy Policy

Categories

  • News
  • Markets
  • Features
  • Education
  • Media
  • Reviews

TheDailyChain © 2020. The Home of Digital Assets

No Result
View All Result
  • News
    • All News
    • Assets
    • Bitcoin
    • Business
    • Editor’s Picks
    • Technology
  • Markets
    • Market Updates
    • Live Cryptocurrency Market Prices
    • Press Release
  • Features
    • Articles
    • Opinion
    • Interviews
    • Quiz
  • Education
    • Blockchain
    • Trading
    • Investing
    • Safety
  • Media
    • Video
    • Podcasts
  • Reviews
  • Asset List

TheDailyChain © 2020. The Home of Digital Assets

At The Daily Chain, we are committed to protecting the personal data of our audience.
In light of the General Data Protection Regulation, we are asking our audience in Europe to consent to the use of cookies by The Daily Chain and its partners to continue to our site. These cookies are used to personalize your user experience (content and ads) and support and improve the site. Please click “I Agree, Continue to Site” below to consent to the use of this technology and continue to TheDailyChain.com. Visit our Privacy Statement to learn more. Cookie settingsAgree, continue to site
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

bitcoin
Bitcoin (BTC) $ 32,702.00 8.47%
ethereum
Ethereum (ETH) $ 1,234.17 9.29%
tether
Tether (USDT) $ 0.998493 0.35%
polkadot
Polkadot (DOT) $ 17.17 9.62%
ripple
XRP (XRP) $ 0.276802 6.62%
cardano
Cardano (ADA) $ 0.349375 14.03%
litecoin
Litecoin (LTC) $ 137.42 5.46%
chainlink
Chainlink (LINK) $ 22.20 20.40%
bitcoin-cash
Bitcoin Cash (BCH) $ 432.81 5.09%
stellar
Stellar (XLM) $ 0.274160 11.20%
Newsletter

Join our newsletter!

Enter your email to receive our newsletter.

Don't worry, we don't spam