• About us
  • Contact Us
  • Privacy & Policy
CryptoCoinNewsHub.com
No Result
View All Result
Sunday, July 12, 2020
  • Home
  • Live Updates
    • Cryptocurrency Prices
    • Live ICO
    • Live Exchange
  • Crypto News
    • Bitcoin
    • Ethereum
    • Ripple
  • Blockchain
  • Tech
  • Business
  • Trading
CryptoCoinNewsHub.com
  • Home
  • Live Updates
    • Cryptocurrency Prices
    • Live ICO
    • Live Exchange
  • Crypto News
    • Bitcoin
    • Ethereum
    • Ripple
  • Blockchain
  • Tech
  • Business
  • Trading
No Result
View All Result
CryptoCoinNewsHub.com
No Result
View All Result
Home Blockchain

JPMorgan Warns Stablecoins Like Libra at Risk of ‘System Gridlock’

September 6, 2019
in Blockchain
2 min read
0
JPMorgan Warns Stablecoins Like Libra at Risk of ‘System Gridlock’
152
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter

The new breed of stablecoins led by Facebook’s Libra could be vulnerable to failure in periods of network stress. 

According to an analysis from JPMorgan released on Sept. 5, they lack the short-term liquidity of other payments systems, so usage could grow faster than the network can safely support.

Transaction growth could outpace network capacity

In a note to clients, analysts highlighted the potential for substantial growth in stablecoin payment systems like Libra. 

But JPMorgan urges caution if the networks become responsible for a significant proportion of global transaction activity. The note explains: 

“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.”

Further risk to Libra from negative yields

Another risk pointed out in the note was that of negative yields. Libra will rely on income from collateral in its reserve account of fiat currencies. However, yields on most major currencies are already negative, and trends point to further global monetary easing. 

JPMorgan notes: 

“Any system that relies on reserve-asset income to fund operational and other ongoing costs becomes unstable in a negative yield world […] a fully negative yielding Libra reserve has become a plausible (some would argue likely) risk.”

Facebook’s Libra is one of a raft of incoming stablecoins from entities such as Binance, and even the Chinese central bank.


Credit: Source link

RELATED  Facebook’s Libra Concept Will Impact Cross-Border Payments: Ex-PBoC Chief
  • Trending
  • Comments
  • Latest
BTC Outflow on BitMEX Exceeded Inflow by $73M: TokenAnalyst

BTC Outflow on BitMEX Exceeded Inflow by $73M: TokenAnalyst

July 21, 2019
Fidelity Joins Blockstream’s New Institutional Bitcoin Mining Service

Fidelity Joins Blockstream’s New Institutional Bitcoin Mining Service

August 9, 2019
Hackers Steal $4 Million Worth of Crypto from Bitrue

Hackers Steal $4 Million Worth of Crypto from Bitrue

June 27, 2019
UK Advertising Watchdog Upholds Complaint Against BitMEX Bitcoin Ad

UK Advertising Watchdog Upholds Complaint Against BitMEX Bitcoin Ad

August 14, 2019

Confiscated Bitcoins by Tax Agents Remain in a Criminal’s Wallet

February 7, 2020

XRP Beats Ethereum and Bitcoin as the Best Performing Crypto

February 1, 2020

Robin Hood- Problems in more than just Sherwood Forest

January 28, 2020

One Wallet Has 27% of Ether in Old MakerDAO Network

January 26, 2020
CryptoCoinNewsHub.com

CryptoCoinNewsHub.com is an online news portal which aims to provide latest trendy crypto news around the world with real time updates.
Email us hello@cryptocoinnewshub.com

Topics to Cover

  • Bitcoin
  • Blockchain
  • Business
  • Crypto News
  • Ethereum
  • Ripple
  • Tech
  • Trading

Whats New Here!

  • Confiscated Bitcoins by Tax Agents Remain in a Criminal’s Wallet
  • XRP Beats Ethereum and Bitcoin as the Best Performing Crypto
  • Robin Hood- Problems in more than just Sherwood Forest

Subscribe to get more

Simply subscribe to our newsletters and we will be in touch. Don't worry, we won't spam you

© 2019 CryptoCoinNewsHub.com - All rights reserved

No Result
View All Result
  • Home
  • Live Updates
    • Cryptocurrency Prices
    • Live ICO
    • Live Exchange
  • Crypto News
    • Bitcoin
    • Ethereum
    • Ripple
  • Blockchain
  • Tech
  • Business
  • Trading

© 2019 CryptoCoinNewsHub.com - All rights reserved

  • bitcoinBitcoin(BTC)$8,152.26-0.70%
  • ethereumEthereum(ETH)$175.30-1.63%
  • rippleXRP(XRP)$0.252799-0.58%
  • bitcoin-cashBitcoin Cash(BCH)$242.68-2.16%
  • tetherTether(USDT)$1.000.27%
  • litecoinLitecoin(LTC)$55.01-1.92%
  • eosEOS(EOS)$3.11-2.39%
  • binance-coinBinance Coin(BNB)$18.56-2.84%
  • cardanoCardano(ADA)$0.042556-2.10%
  • stellarStellar(XLM)$0.064655-3.04%
  • tronTRON(TRX)$0.016891-2.25%
  • moneroMonero(XMR)$58.64-0.32%
  • neoNEO(NEO)$11.682.51%
  • iotaIOTA(MIOTA)$0.245122-1.96%
  • dashDash(DASH)$65.431.15%
  • nemNEM(XEM)$0.039494-0.75%