David Marcus, the co-creator of Libra and the leader of Facebook’s Calibra’s project wrote a Twitter thread about how Libra would not affect the monetary sovereignty of nations.
Libra is the digital currency announced by Facebook back in June this year has been facing scrutiny from major regulatory agencies around the world.
Libra Wouldn’t Threaten The Sovereignty of Nations
In a recent Twitter thread, David Marcus explained how Libra would not be threatening the sovereignty of nations when it comes to money. During the last few months, many regulators suggested Libra would be affecting countries’ monetary policies, among other things.
According to Mr. Marcus, Libra would be a better payment network and system that would be running on top of existing currencies. One of the main goals of this digital asset is to deliver meaningful value to consumers all around the world.
The virtual currency is expected to be backed 1:1 by a basket of “strong currencies.” Some of them include the euro (EUR), the pound sterling (GBP), the Singapore dollar (SGD), the U.S. dollar and the Japanese yen (JPY). Libra could eventually add new currencies to its basket of assets.
On the matter, David Marcus commented:
“As such, there’s no new money creation, which will strictly remain the province of sovereign Nations. We also believe strong regulatory oversight preventing the Libra Association form deviating from its full 1:1 backing commitment is desirable.”
Thus, Marcus claims it is necessary for Libra to be regulated in order to constrain the future decisions of the company to eventually move away from the 1:1 backing commitment.
7/ We will continue to engage with Central Banks, Regulators, and lawmakers to ensure we address their concerns through Libra's design and operations.
— David Marcus (@davidmarcus) September 16, 2019
In addition to it, Marcus mentioned they will continue engaging with Central banks around the world. They will also keep talking and discussing Libra with regulators and lawmakers to be sure that all the concerns related to Libra are addressed by the company.
One of the main issues Libra would have to address is related to the process they will follow in order to add new currencies to back the Libra digital asset. The Libra Association could eventually become a private player with the ability to put pressure on specific countries.
Top officials from different regulatory agencies and figures from the cryptocurrency space are now in a meeting in Basel, Switzerland to discuss some of the aforementioned issues related to Libra and financial institutions.