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Social media giant Facebook has found itself knee-deep in regulatory muck since it announced plans for its Libra stablecoin cryptocurrency this summer.

That thread heated up further last week, when the governments of Germany and France revealed the two nations had agreed to block the Libra within their jurisdictions, saying in a joint statement that “no private entity can claim monetary power, which is inherent to the sovereignty of nations.”

Naturally, that announcement marked a blockbuster, if not negative, development for the stablecoin project.

Libra

Indeed, it was big enough news that Facebook’s former blockchain lead turned Calibra head David Marcus responded on September 16th with a Twitter thread in which he made a case for why Libra would not pose a challenge to any nation’s sovereignty.

In that thread, Marcus argued Libra would be a “better payment network and system running on top of existing currencies.” The Libra co-creator further noted that since the Libra would be based on a basket of major fiat currencies, “there’s no new money creation, which will strictly remain the province of Soverign nations.”

Whether Marcus’s case will prove useful in winning over regulators remains to be seen. In the mean time, he and his colleagues will have their hands full in engaging with regulatory authorities across the world, though Marcus and company still have their eyes on the horizon.

“Separately, 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 Calibra,” Marcus added, with Calibra being the new Facebook subsidiary that is set to provide financial services in the Libra ecosystem. 

Crypto Space Spot Checks Marcus’s Remarks

In responding to a series of questions from Senator Mark Warner (D-VA) this month, Facebook reportedly said the U.S. dollar, the euro, the British pound, the Japanese yen, and the Singapore dollar (SGD) were currencies being closely considered to make up the Libra’s basket.

With that said, it’s precisely what currencies make it into this basket — and what currencies don’t — that gives the Libra project the potential for tangible influence over nations, as stakeholders around the cryptoeconomy said in rebutting Marcus’s Monday remarks.

So Facebook may not be involved in the creation of new money with the Libra. But as SpankChain chief executive officer and MolochDAO creator Ameen Soleimani commented, the project isn’t totally impotent in its ability to have clout over states:

“No, Libra will not be able to print money. Yes, Libra will have the power to dump currencies in its basket at super massive scale, giving it financial leverage over sovereign states.”

So as the Libra project rises, and potentially becomes more pivotal in the global economy, it will become increasingly important as to what currencies make the basket’s cut.

We’ve already seen the People’s Bank of China (PBoC) accelerating its plans for a digital yuan this year, partially in response to the proposal of the Libra and over the central bank’s desire to resist the potentially dollar-centric project.

“There would be in essence one boss, that is the U.S. dollar and the United States,” Wang Xin, a researcher at PBoC, skeptically estimated this summer.

The Central Banks Would Like a Word

On September 16th, representatives of the Libra project met with officials from 26 central banks from around the world, including the U.S. Federal Reserve, in Basel, Switzerland.

The purpose of the congress? Giving these top banking officials a forum to directly question the stablecoin’s builders.

It’s likely the only the first of many more meetings to come, but Facebook and the majority of the Libra Association’s members seem up to the task for now.


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Posted by William M. Peaster

William M. Peaster is an expert writer and editor who specializes in the Bitcoin, Ethereum, and Dai beats in the cryptoeconomy. Has appeared in Blockonomi, Binance Academy, Bitsonline, Bitcoinist, and more. Enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. Learning Solidity. Follow him on Twitter: @WPeaster


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