Despite overwhelming resistance from all around the world, Facebook is still determined to see its Libra stablecoin become a reality at some point. The U.S., France, Germany and others have already made it known that they are more than just a little apprehensive about the digital currency – and Facebook’s ability to offer it, given its shaky track record on privacy – and other countries have announced a definitive ban on the currency inside their borders. Still, the struggle continues and Facebook’s David Marcus has weighed in on the concerns.
Marcus is the co-creator of Libra and the former president of PayPal. As the stablecoin’s co-creator, he has more than just a little love for the project and is in charge of trying to turn it into a legitimate alternative. On Twitter yesterday, he launched a series of tweets to try to clear the air on Libra, offering several reasons why it will work.
1/ About monetary sovereignty of Nations vs. Libra:
— David Marcus (@davidmarcus) September 16, 2019
Libra is reportedly going to be “backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve.” Marcus adds that governments are more than welcome to oversee the project to ensure it doesn’t stray from its model. The Tether project could learn a lot from the executive.
Marcus feels that Libra would not be a threat to any nation’s sovereignty, but many have not yet been convinced that this is true. In addition to Facebook’s history of either willfully releasing personal information or using its platform to its advantage, there have been numerous security breaches that have led to the loss of data and money. The jury is still out on whether or not Libra would be able to perform any better or cleaner.
Facebook is still intent on convincing the world that it has grown up. Representatives from the company, as well as from JP Morgan and others, met with global central bank officials this week to discuss crypto and, particularly, stablecoins and the role the latter will play in an evolving financial realm.
The Bank for International Settlements (BIS) talks about the meeting in a press release, adding that it was convened by a working group comprised of Group of Seven members to better understand stablecoins and to possibly formulate policies for their acceptance. Its findings are expected to be released sometime in mid-October.
Those findings will most likely not put stablecoins in a very good light. Benoît Cœuré, who is a European Central Bank board member and chair of the BIS-hosted Committee on Payments and Market Infrastructure, states in the release, “As a new technology, stablecoins are largely untested, especially on the scale required to run a global payment system. They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.”
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