The co-creator of the Facebook Libra project has debunked the popular narrative that it will pose a threat to central banks.
September 16, 2019, | AtoZ Markets - The CEO of Facebook’s Calibra – the entity created by Facebook to provide financial services including a digital wallet for the planned Libra cryptocurrency – has debunked claims from authorities that the project is a threat to nations’ “monetary sovereignty.”
Calibra Head takes to Twitter to defend Libra project
The co-creator of Libra, David Marcus took to Twitter on Monday to try and dispel some of the fears that have been created. For instance, France’s Economy and Finance Minister, Bruno Le Maire said last Thursday that “The monetary sovereignty of states is under threat,” and further threatened to block the project’s development in the EU.
In a Twitter thread titled “About monetary sovereignty of Nations vs. Libra,” Marcus wrote, a former PayPal executive noted that Libra will be tied to a set of fiat currencies. This means that the nascent cryptocurrency Libra is unlikely to be a threat to central banks.
In a Twitter thread titled “About monetary sovereignty of Nations vs. Libra,” Marcus tweeted:
“Recently there's been a lot of talk about how Libra could threaten the sovereignty of Nations when it comes to money. I wanted to take the opportunity to debunk that notion.”
“Libra will be backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve. As such there’s no new money creation, which will strictly remain the province of sovereign Nations.”
Libra project regulation is welcomed
As well as stating that Libra won’t be able to exist without fiat currencies, Marcus welcomed the attention from regulators, saying that Facebook wants greater regulatory oversight of its cryptocurrency project.
“We also believe strong regulatory oversight preventing the Libra Association from deviating from its full 1:1 backing commitment is desirable. We will continue to engage with Central Banks, Regulators, and lawmakers to ensure we address their concerns through Libra’s design and operations.” the Calibra chief further clarified.
Finishing off his elaborate tweets, the executive added that he wants the Libra Association – a group of 28 companies that have backed the digital asset – to be in charge of the Libra project once they have ratified a charter.
“I’m looking forward to the Libra Association taking on full leadership of the project soon after its charter has been ratified so I can focus on building [Libra wallet] Calibra.”
While Libra still remain under the scrutiny of regulatory watchdogs, the governor of the Bank of England Mark Carney has recently made some positive comments regarding the potential impact of Facebook native coin on the US dollar, stating that the token could “reduce the influence” and eventually “replace” the world’s reserve currency.
Think we missed something? Let us know in the comments section below