Facebook’s Libra has been one of the most anticipated cryptocurrency projects in recent years. It’s an initiative started by Facebook and backed by various other global companies. However, it has faced huge pressures from governments, especially the U.S. Congress, where they seem to be reluctant to give the green light to the Libra project.
Barry Eichengreen, who’s a professor at UC Berkeley, has stated that Libra already has too many unsolvable problems (including the resistance from government officials). For these reasons, he feels sceptical about the idea of Libra.
He believes that it’s not possible for Facebook to be massively adopted because that will require Facebook to become a privately-owned, for-profit central bank that doesn’t bow to federal governments directly. The problem with this scenario is that federal governments won’t ever allow it to happen.
He also claimed that the stablecoin issuers and funders, in general, don’t know much about monetary economics. They might be experts at blockchain, but they don’t know much about economics. He claimed that stablecoins are too easy to attack if they are dependent on bank accounts and/or over-collateralization of other assets. The thing is, there’s no easy fix to these fundamentals behind stablecoins.
Source: CoinTelegraph
