DUBAI (S&P Global Ratings): The proposed cryptocurrency Libra could transform some financial services but is unlikely to become a reserve currency, S&P Global Ratings says in "The Future Of Banking: Regulators To Decide If The Crypto Stars Align For Libra," published today on RatingsDirect. "Libra resolves some of the main issues we've identified for cryptocurrencies as a means of exchange and store of value," said S&P Global Ratings credit analyst Mohamed Damak. "However, due to financial and macroeconomic stability concerns, we believe national governments may prevent the Libra from becoming a parallel source of credit creation outside central banks' monetary policy setting."

In that sense, Libra can be seen as more like a payment system, similar to PayPal or WeChat, but with a blockchain and a currency. We believe that if Libra takes off, it will be subject to a substantial regulatory approval process. We expect some divergence in the regulatory stance across the globe similar to that for other cryptocurrencies. "Although the founding members are targeting a first-half 2020 launch, this level of scrutiny could imply some delays or limited scope in the initial roll-out," Mr. Damak concluded.

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