Facebook’s Head of Blockchain: Libra Won’t Create New Money
Libra continues to make waves in the community. The co-creator of Libra and head of Calibra, David Marcus, stated, among other things, that the stablecoin will not be threatening monetary sovereignty of nations as Libra is not going to create new money.
Libra Won’t Challenge Sovereignty of Nations
In a series of Tweets, David Marcus responded to the recent backlash towards Libra. Facebook’s project has the sole purpose “to be a better payment network and system running on top of existing currencies, and delivering meaningful value to consumers all around the world.”
The executive continued by stating that Libra will be backed 1:1 by a “basket of strong currencies”, meaning that an equivalent value will exist in its reserve for every unit of Libra. Marcus also stated no new money will be created this way, “which will strictly remain the province of sovereign Nations.”
The head of blockchain at Facebook continued the post with the reassurance that the company will continue working closely with central banks, regulators, and lawmakers to make sure that all concerns are handled effectively.
ECB Meeting and Backlash
Marcus’ line of defense came after Benoit Coeure, member of the Executive Board of the European Central Bank, called for a tough regulatory approach towards stablecoins because of their lack of serious testing. Speaking at an event at the Bank of International Settlements (BIS) in Basel, where the Group of Seven working group on stablecoins met to discuss the regulatory concerns which may be posed by the increasingly popular digital currencies.
Stablecoins are largely untested, especially on the scale required to run a global payment system… The bar for regulatory approval will be high. – He said.
Facebook’s stablecoin has also been under the radar of data protection officials from the US, the UK, the EU, Australia, and Canada, as possible privacy issues were brought to their attention. The Libra Association experienced a huge blow last month when some of its backers tried distancing themselves from the project.
The controversy continued strongly with news from France and Germany. Both European countries declared that they will be fighting Libra and possibly even banning it.
Libra is set to be launched in 2020 but seemingly, Facebook’s blockchain venture is facing numerous regulatory challenges that need addressing if it wants to be released in time.
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