Yesterday, Facebook released a White Paper on their planned supposed cryptocurrency, Libra, which has apparently long been under development. This triggered two stories in the New York Times, as well as lots of commentary by lots of people, including several posts by Tyler Cowen at Marginal Revolution, who is moderately favorable to the proposal. This is supposed to become an international currency backed by a reserve account provided initially by 27 major corporations such as Uber and VISA, which will be tied in value to a basket of currencies. While tied to Facebook, it is supposed to have a firewall separating FB’s data on individuals from data arising from anybody’s activities in connection with Libra. It is to be overseen by an association based in Geneva and run by the 27 companies, each of which will have control over a node in the supposed blockchain of the currency. It is to use a new program, “Move,” and will have potential features that resemble Etherium, such as an ability to set up contracts.
First of all, it may be that Libra will not be allowed to get off the ground by politicians or regulators. Rep. Maxine Waters (D-CA) has demanded a halt in the development until Congress can look at it more closely. There is concern that it may be too much of a real currency in competition with the USD, which might be illegal. Other nations reportedly are worried about regulatory issues based on the apparent partial resemblance to a bank, with no banks among the 27 companies, with France being one nation also expressing such concerns. There are also no Wall Street firms in the 27, for better or worse.