“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell said during his semi-annual testimony on monetary policy before the U.S. House of Representatives Financial Services Committee.
“I don’t think the project can go forward” without addressing those concerns, he added later in the hearing.
Everything Facebook does should raise serious concerns.
1) Currency is one of the critical elements of both a sovereign nation or other economic entity (EU for example), and of a stable economy.
2) A good currency is managed for the benefit of its associated economy, sovereign, people, etc. Again, critical. Money supply is probably the single biggest lever on any modern economy. If that lever is moved the wrong way just a bit, things begin to fall apart. If it were disconnected completely, you’d have something close to anarchy.
3) A currency managed primarily to benefit a single corporation is guaranteed to have different incentives than a currency managed as above.
Part of Facebook’s argument is that a currency like this could help replace badly managed currencies, and bring banking-like services to people who can’t otherwise access them. They have a point. If they can manage the technical challenges, create a stable crypto, and make it available to people who haven’t been properly served by their own native currencies, they could do some good.
But if successful, Facebook starts to look a lot more like a sovereign itself, and that’s a can of very ugly worms. Their reputation in this regard does not give me confidence.
Yes, but would you expect the FED to get behind any cryptocurrency?
I’m no FB fanboy, but all cryptocurrencies threaten to undermine the FEDs greenback monopoly.