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 planned stablecoin would not threaten nations’ monetary sovereignty, as Libra is not meant to create new money.
Libra Won’t Challenge National Sovereignty
In a series of tweets, David Marcus responded to the recent backlash against Libra. He stated that Facebook’s project aims solely “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 that no new money will be created, “which will strictly remain the province of sovereign Nations.”
The head of blockchain at Facebook asserted 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’s posts came after Benoit Coeure, a member of the Executive Board of the European Central Bank, called for a tough regulatory approach towards stablecoins in light of their lack of serious testing. He spoke at an event held at the Bank of International Settlements (BIS) in Basel, where the Group of Seven working group on stablecoins met to discuss regulatory concerns posed by 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.”
Facebook’s planned stablecoin has also been in the crosshairs of data protection officials from the US, the UK, the EU, Australia, and Canada, as possible privacy issues have been brought to their attention. The Libra Association experienced a huge blow last month when some of its backers began distancing themselves from the project.
The controversy continued when France and Germany declared that they would fight Libra and possibly even ban it.
Libra is set to launch in 2020, but Facebook’s blockchain venture seemingly faces numerous regulatory challenges that will need addressing in order for it to be released next year.