The Real Threat From Facebook's Libra Coin


Staff member
Apr 6, 2019
Facebook’s Libra cryptocurrency is generating an immense amount of hype. Some hail it as the beginning of the end of sovereign fiat currencies. Others believe it will draw people into the cryptocurrency world, leading them inexorably to place their faith in the One True Cryptocurrency, Bitcoin. And others worry about the effect on central bank monetary policy and the possibility that a run on Libra could trigger another financial crisis.
I think this is all massively overblown. But there is one aspect that should worry everyone – and almost nobody is talking about.

BRAZIL - 2019/06/24: In this photo illustration a Facebook Libra logo seen displayed on a smartphone. (Photo by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Firstly, let’s look at the claim that Libra could replace sovereign currencies. This is fundamentally nonsense. Sovereign currencies are the vehicle in which governments accept taxes. Unless foolhardy governments accept Libra as an alternative to their own currencies (believe me, this is not a good idea), people will always need sovereign currency. And no, governments are not about to disappear and taxes come to an end. Dream on, crypto-libertarians.

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  • Facebook Libra Coin is built on an open-source blockchain called the Libra Blockchain featuring its own proof-of-stake protocol. Backed by a reserve of various assets designed to give it intrinsic value, it is governed by the independent Libra Association tasked with evolving the ecosystem. Facebook teams played a key role in the creation of the Libra Association and the Libra Blockchain, working with the other Founding Members. While final decision-making authority rests with the association, Facebook is expected to maintain a leadership role through 2019. The Libra mission is to reinvent money and transform the global economy so people everywhere can live better lives.

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