Facebook's proposed crypto-currency - 'Libra' - faces a damning dilemma. Its issuers can render it regulatorily tolerable only by rendering it monetarily superfluous. It is accordingly doomed to no better than glorified PayPal status.
’ that have emerged in the crypto space over the last several years. This is, probably, the best route for Facebook and its partners to take if their ‘money’ is to behave as … well, money.
But the problem this raises for Libra is that these very features, along with the scale on which Libra would operate and the privacy concerns it would raise, render the would-be currency either superfluous like most other stablecoins are, or legally impossible to issue and administer without domestic and transnational regulatory licensure and oversight.
Let us turn next, then, to the regulatory concerns that these features raise, and to the regulatory responses that Libra will accordingly draw. The first things to note about Libra from a regulatory point of view are its scale and scope in the user-base and jurisdictional dimensions. Facebook and its partnersthat with somewhere between two and three billion users across the globe, Facebook is well positioned to offer a payment medium that can immediately be used by nearly a third of the earth’s population – and can be used not only via desktop and laptop computers, but also via smart-phones and other electronic devices.
This is of course very good news from both a scalability and a financial inclusion point of view, and Facebook and its partners are understandably eager to tout it. But it also means Libra would immediately be what financial regulators call ‘’ in potential, as well as transnational in scope. And this in turn means that our regulators will be very concerned, both in their domestic and in their transnationally collaborative capacities, about any vulnerabilities that inhere in Libra’s design.
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