While governments around the world seem to be raising their opposition to Facebook’s Libra stablecoin, the project has still found a healthy amount of support. According to a report by Yahoo Finance, Stephen Moore, a former economic adviser to President Donald Trump and a fellow at The Heritage Foundation, believes the project is viable and that it will have real-world implications.
Moore, traditionally a conservative, told Yahoo, “It’s interesting, because this [Facebook’s Libra] represents a new challenge for central bankers that they now have competition from private currencies.” He added that he now understands what crypto fans have been asserting all along. After “studying up on cryptocurrencies,” he has come to the realization that crypto “is coming” and that central bankers need to accept that fact. Moore asserts, “I think on balance it’s a good thing.”
Moore isn’t the only one to realize that crypto is going to change how banks operate. They’re either going to have to adapt to the evolving economic world or be left behind—and that includes central banks, regardless of their government connections. The Bank of International Settlements (BIS) said in a blog post this past Sunday, “Big techs have the potential to become dominant through the advantages afforded by the data-network-activities loop, raising competition and data privacy issues. Public policy needs to build on a more comprehensive approach that draws on financial regulation, competition policy and data privacy regulation.”
It added, “The aim should be to respond to big techs’ entry into financial services so as to benefit from the gains while limiting the risks. As the operations of big techs straddle regulatory perimeters and geographical borders, coordination among authorities—national and international—is crucial.”
Russia has already said it wouldn’t legalize the Libra and it won’t be available in countries that are sanctioned by the United States. The U.S. itself is interested in looking closer at the project, with Senator Josh Hawley explaining to Yahoo, “We need to see exactly what their specific proposals are, but I’m very concerned about Facebook’s behavior on a range of fronts. I’m concerned about their size, I’m concerned about their anti-competitive conduct, I’m concerned about their rampant violations of privacy.”
There is merit to the concerns and it’s good that the government wants to investigate further. However, those concerns can be mitigated and no one can argue that Libra could be worse than what has been uncovered about traditional financial institutions. Since there are many countries throughout the world where access to banking solutions is not available, Libra is going to easily, thanks to the billions of global Facebook users, begin to make its way across the globe and no government or central bank is going to be able to stop it.
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