Richard Waters writes that it would be a shame if early mis-steps cut short further deliberation. There are plenty of substantive issues that need to be aired — even if Libra proves to be a dead end.
Central banks, for instance, have rightly worried about the risks that so-called “stablecoins” like Libra could pose to the financial system, should they be adopted at scale. The international FSB has been working on some of these problems, and hopes to come out with rules by the middle of next year. If Libra has added a new urgency to the regulators’ deliberations, then so much the better. The same can be said for the fear that Libra would become a “dark money” network making it easier to do things like launder drug money and finance terrorism. With the rise of cryptocurrencies, such networks already exist. One answer could lie in national regulation of the “apps” that run on the digital money platform — though the borderless nature of the internet poses an obvious challenge. Regulation of the platform itself could also be a possibility, for instance by capping the size of payments it can handle or enshrining a way to reverse transactions in exceptional circumstances (an idea that is anathema to cryptocurrency purists, but might be a necessary compromise).
Another major complaint about Libra is that it will end privacy as we know it. Through its users’ payment histories, Facebook would have access to a massive trove of new data. This will only happen, though, if those users first sign up for — and use — the company’s own digital currency app, known as Calibra.
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