Libra: Heads I win – tails you lose

23 July 2019

Position paper

Finance Watch releases a highly sceptical initial assessment of plans to create a new global stablecoin, Libra.

While Finance Watch is open to technological progress in this area, we have identified several specific concerns with the Libra proposal based on an initial analysis of the Libra White Paper:

  • Libra users could lack data and consumer protection: Libra could increase the inappropriate use of data and digital profiling to the disadvantage of citizens; in addition, Libra users could lose money if the consortium were to stop backing Libra in a global crisis.
  • Libra could pose risks to financial stability: Libra could increase systemic risk in financial markets, it could exacerbate a global financial crisis, and be the subject of intense speculative trading.
  • Libra could threaten democratic systems: By design, Libra would further concentrate power in the hands of digital oligopolists, it might become a channel for “dirty money” and a private “fiat” currency without any public scrutiny or democratic accountability.