The existential threat of Facebook’s digital currency
By Karen Petrou
Facebook’s recently launched Libra promises a lot: a new construct made up variously of a virtual currency, a payment system, a digital wallet, a remittance service, a new financial-intermediation vision … and a whole lot of rhetoric about the liberation of roughly 2.6 billion people from the thrall of traditional banking. In the white paper behind the announcement, Facebook provided details on the things it knows well. For example, much thought is given to software in hopes that someone will figure out how to build capacity on what the fine print describes as this financial prototype. But for Libra to be a robust product with the capacity to both cross-sell Facebook services and handle the thousands of transactions a second its ambitious flaunt anticipates, Facebook or — more likely — global and U.S. policymakers need to quickly determine whether Libra is more than an astute way to bypass growing U.S. antitrust, privacy and content-regulation challenges. There’s even more at risk than election integrity, personal privacy and the free flow of information. If Libra springs free and becomes a major financial force, then the household savings of vulnerable consumers and the stability of global finance are on the line.