In the weeks since Facebook announced its plans for the new Libra coin the project has received criticism over whether it is likely to get off the ground while regulatory concerns remain unaddressed. The US treasury secretary this week also warned of its potential for misuse. 

The launch of the Libra project comes alongside the timely release of the Bank for International Settlements’ (BIS) annual economic report which this year it features a special chapter on the entry of big tech into finance. The report highlights how the entry of large technology firms ("big techs") into financial services presents new and complex trade-offs between financial stability, competition and data protection.

This raises questions are to what risks are associated with the move of big tech into financial services? Does this really serve the underbanked and it is necessarily promoting competition due to the dominance big tech already has? 

However, as the BIS report emphasises, the entrance of big tech into finance services does offers many potential benefits including low cost structures and the ability to enhance the efficiency of financial services provision. These are all benefits that are certainly worth maintaining, subject to proper maintenance of privacy, financial stability and market competition.