Facebook’s announcement in June 2019 of plans to launch a “simple global currency” called Libra to “empower billions of people” to move money around the world with the ease of a text message has sparked predictable skepticism in the Trump administration, the US Congress, and the Federal Reserve. An equally revealing reaction, however, has come from China, which sees Libra as a threat to the comfortable lead it has enjoyed in financial technology or “fintech” since 2013. US officials need to pay attention to China’s response before setting rules that would stifle Facebook’s innovation before it can get off the ground.
Facebook’s director of global affairs speaks to Thomas Farrar about the launch of the company’s oversight board, competition and government regulation.
Thomas Farrar, Brent Harris
Facebook’s planned cyber currency, Libra, is little more than a glorified currency board – the failed arrangement that in 2001 caused the largest sovereign default the world had ever seen. A major risk is devaluation – and the problems don’t stop there.
Roberto Chang is Distinguished Professor of Economics at Rutgers University.
Andrés Velasco, a former presidential candidate and finance minister of Chile, is Dean of the School of Public Policy at the London School of Economics and Political Science. He is the author of numerous books and papers on international economics and development, and has served on the faculty at Harvard, Columbia, and New York Universities.