Big tech groups like Facebook could "quickly establish a dominant position" in global finance and pose a potential threat to competition, financial stability and social welfare, according to Bank for International Settlements.
BIS, the central bank of central banks, said regulators around the world have to "revolve" rules to deal with the structural changes arising from participants controlling "important digital platforms" such as e-commerce sites and social networks.
The warnings in an excerpt of the BIS forthcoming annual review published Sunday highlighting regulator turmoil after Facebook last week outlined its desire to offset the financial system through the launch of Libra, a "global digital currency".
Facebook has proclaimed Libra as a way to improve economic integration for the 1
The report recognized these potential benefits, suggesting that superior customer data could lead to more effective decision making and lower barriers to the provision of financial services.
However, it was also pointed out that misuse of these data could have "negative economic and welfare effects".
For example, companies could Exclude high-risk groups from socially desirable insurance markets or price discriminate by setting maximum interest rates a borrower would be willing to pay for a loan.
Hyun Song Shin, financial adviser to the BIS and research director, said: "The goal should be to respond to big tech's access to financial services to take advantage of the gains while limiting the risk. ] "Public policies need to build on a more comprehensive approach that draws on financial regulation, competition policy and data protection."
Regulators immediately responded to news about Libra's launch, with the Bank of England governor Mark Carney, telling a meeting between central bankers in Portugal, that if Facebook succeeded in attracting users "it would instantly become systemic and subject to the highest standards of regulation." who will examine the risks of such currencies and try to find out how they can ensure that they have sufficient control over money laundering
The BIS report said such coordination between national and international authorities would be "crucial".