Facebook is defending Libra gainst fears that the envisioned cryptocurrency could replace sovereign currencies from the U.S. dollar to the Euro and threaten central banks’ control over money creation.
David Marcus, the executive leading the Libra project, posted a series of tweets the same day members of the Libra Association met with regulators convened by a G-7 working group in Switzerland. He said that creating Libra isn’t the digital equivalent of printing U.S. dollars or minting new euros.
Facebook’s crypto plans have faced intense push-back from regulators all over the world. One of the biggest concerns is that the new digital currency will be used by smugglers, drug dealers and terrorists. Another is that the social media giant, which has run afoul of regulators over user data in the past, should not be trusted to handle sensitive financial information.
“Recently there’s been a lot of talk about how Libra could threaten the sovereignty of nations when it comes to money,” Marcus tweeted. “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,” he tweeted. “As such there’s no new money creation, which will strictly remain the province of sovereign nations.”