The IMF Should Take Over Libra
Brilliant ideas that would be catastrophic in the hands of buccaneering privateers should be pressed into public service. That way, we can benefit from their ingenuity without falling prey to their designs.
ATHENS – The Libra Association is fragmenting. Visa, Mastercard, PayPal, Stripe, Mercado Pago, and eBay have abandoned the Facebook-led corporate alliance underpinning Libra, the asset-backed cryptocurrency meant to revolutionize international money. More corporations are likely to follow as pressure upon them mounts from worried governments determined to stop Libra dead in its tracks.
This is a good thing. Humanity would have suffered had Facebook been allowed to use Libra to privatize the international payments system. But the authorities that are now strangling Libra should look to the future and do with it something innovative, useful, and visionary: hand Libra, or its core concept, over to the International Monetary Fund so that it can be used to reduce global trade imbalances and rebalance financial flows. Indeed, a Libra-like cryptocurrency could help the IMF fulfill its original purpose.
When Facebook CEO Mark Zuckerberg announced Libra amid great fanfare, the idea sounded interesting and innocuous. Anyone with a mobile phone would be able to buy Libra tokens with domestic currency and by standard methods such as debit cards and online banking. Those tokens could then be used to make payments to other Libra users, whether to purchase goods and services or repay debts. To ensure full transparency, all transactions would be handled by blockchain technology. In sharp contrast to Bitcoin, however, Libra tokens would be fully backed by copper-bottomed assets.