Facebook wants to become the new power in digital currencies. The Facebook money will be called “Libra”.
However, the digital currency is highly controversial. Now Facebook boss Mark Zuckerberg has defended “Libra” at a hearing before the US Congress.
What makes Libra different from previous crypto money?
Bitcoin & Co are not linked to classic currencies and therefore fluctuate greatly in value. Facebook wants to tie “Libra” to the euro and US dollar, among other things. The money should be controlled by a non-profit company. This company alone should be allowed to issue new digital money.
Criticism from the US government and banks
A stable currency without fluctuations – that is a solid cushion for savers. With enough members in the “Libra Association”, this would also be the new cryptocurrency, because deposited money would then go into a large reserve fund that is managed by various banks. Interest would then serve to cover costs and be paid out as dividends to the members of the “Libra Association”, who are therefore all interested in the currency remaining stable so that there are many users of the currency.
But not everyone sees it so positively: Jerome Powell, Chairman of the Federal Reserve Bank, for example, expressed serious concerns about privacy, money laundering, consumer protection and financial stability in July 2019. As bank chairman, he is of course suspicious, because if fewer people invest in US dollars and more in Libra, that will of course not be good for the dollar exchange rate.
But politicians, such as Brad Sherman, also criticize Libra. However, Sherman makes a very stark comparison :
He compares the introduction of Libra to the terrorist attacks of September 11, 2001! While Osama bin Laden had the innovative idea of flying two planes into the World Trade Center, which resulted in not only thousands of people dying, but also many people dying from cancer and other diseases, Libra would trigger something similar.
With the creation of this currency, which would undoubtedly be used by drug traffickers, there would be more drug deaths, tax evaders would be able to hide their money better, which would mean there would be less money for cancer research, which would also lead to more deaths, and the federal government would then have less Money to prevent Iran and North Korea from developing nuclear weapons, for example.
It's understandable that Sherman was heavily criticized for his very exaggerated comparison, but he sticks to his opinion: Zuckerberg is not as evil as bin Laden, because bin Laden wanted to kill Americans, while Zuckerberg doesn't care if Americans die because of it.
Conclusion
Whether Libra will become a new world currency is still completely open.
Certainly interesting for savers at first glance, but uncertainty currently predominates: too few precise regulations, too few investors, and of all things Facebook as the initiator, which is not necessarily known for having taken a lot of care with privacy in recent years have.
We will know more in 2020.
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Notes:
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