Well, without a doubt Libra (the project initially backed by Facebook) certainly had a baptism of fire when it was first announced almost a year ago, in June 2019. The founding 28 members invested $10 million, although Paypal Visa, Mastercard, Stripe, Mercado Pago, Booking.com and eBay all left Libra last October.Founder of Facebook, Mark Zuckerberg, was interrogated in a Congressional hearing as governments became concerned that, with 2.6 billion active monthly users, this ‘new-fangled’ Libra currency could even threaten the ‘mighty greenback’ - aka the US$. An American Senator committee member was reported in Australian Financial Review having said, “Large payment companies are wise to avoid legitimising Facebook’s private, global currency. Facebook is too big and too powerful, and it is unconscionable for financial companies to aid it in monopolising our economic infrastructure. I trust others will see the wisdom of avoiding this ill-conceived undertaking.”
It was not just the Americans who seemed less than keen to embrace Libra’s proposed digital currency. According to GreenWatch, “The G7 group of nations has vowed to block it unless Facebook can prove it is safe and secure. There are concerns the currency could be used for money laundering, disrupt the global financial system, or give Facebook too much control over user data”.
Source: British Network.com
However, Libra Association vice-chairman Dante Disparte said in an interview, "The journey since the original white paper was released has really provoked an important conversation around the world about, how do we appropriately regulate digital payments and digital currencies?” Given that the Chinese are about to launch their own Central Bank Digital Currency (CBDC) and what with the increasing call for other countries to have their own Digital Currencies as well, there will be a need to respond to Disparte’s question!
It is interesting to see Stuart Levey, who was Under Secretary for Terrorism and Financial Intelligence for the U.S. Treasury for 7 years being appointed CEO of Libra, that Temasek (Singapore’s sovereign wealth fund with an estimated value of $313billion) has joined Libra. Temasek Tweeted , revealing its engagement with Libra by saying, “Looking forward to the potential of this #blockchain-based digital currency, and how it can help create a regulated global network for cost effective retail payments”. Libra’s own press statement regarding Temasek’s involvement announced, “Temasek, a global investment company headquartered in Singapore, brings a differentiated position as an Asia-focused investor. Temasek sees innovative technologies such as blockchain as transformative enablers of growth. Temasek’s efforts to support and advance the use of blockchain technology across a range of use cases, asset classes and sectors, reflects its drive to explore, develop and invest in solutions to bring about a better, smarter, and more sustainable world”. Temasek’s engagement with Libra, once again, demonstrates how Asians are comfortable embracing digitisation.
Another significant appointment for Libra is Robert Werner as its General Counsel. He has worked at HSBC, Goldman Sachs (overseeing Privacy and Regulatory Relations) and Merrill Lynch (leading financial crime compliance). Werner also has in depth experience working with governments, having been a Director of the Financial Crimes Enforcement Network for the United States Department of the Treasury.
As well as continuing to talk about a digital currency backed by a basket of fiat currencies, Libra is also looking to create a portfolio of stablecoins each backed by different fiat currencies suitable for different countries. It would therefore be relatively easy, one assumes, to use Libra’s infrastructure thus allowing a corporation to create its own Digital currencies i.e the Facebook coin, Amazon Coin, Google Coin etc?
Indeed, second time around, will the ‘Zuck Buck’ (or a variant) receive a warmer welcome as, like a phoenix, it rises from ashes?
