Facebook’s Libra has found at least one vocal friend inside President Trump’s inner circle.
Economist Stephen Moore who is a close confidant of Mr. Trump and a fellow at The Heritage Foundation told Yahoo Finance, “It’s interesting, because this [Facebook’s Libra] represents a new challenge for central bankers that they now have competition from private currencies.”
Facebook is gearing up to face the wrath of lawmakers and governments in the US as well as around the world. It is scheduled to appear before the The Senate Banking Committee on July 16.
Facebook can use all the ‘friends’ it can get right now.
Moore said, “I think on balance it’s a good thing [Facebook’s Libra].”
More was an economic advisor to Donald Trump’s 2016 presidential campaign. He also advised the Trump administration during the writing and passage of the Tax Cuts and Jobs Act. On March 15, 2019, Trump announced that Moore would be nominated to serve as a governor of the Federal Reserve. Moore withdrew his name from consideration.
Facebook unveiled its cryptocurrency Libra last week. Facebook’s goal is to take advantage of it’s access to unprecedented pool of users (2 Billion +) and create a global unit of monetary trasaction that makes moving money around the world as easy and cheap as sending a text message.
Since the announcement, Facebook has been receiving an overwhelming number of reactions from both private sector and governments throughout the world.
Last week, Bank of England’s Governer Mark Carney said that while he is “open-minded” about Libra, he urged the regulators to carefully scrutinize the project. He said, “Unlike social media, for which standards and regulations are being debated well after it has been adopted by billions of users, the terms of engagement for innovations such as Libra must be adopted in advance of any launch.”
The Bank for International Settlements (BIS), considered to be the central bank for central banks, cautioned that the misuse of data by tech giants could have adverse welfare and economic effects. It did, however, acknowledge the potiential benefits including efficient decision making and lower barrier to financial transactions.
Hyun Song Shin, economic adviser and head of research at BIS said, “The aim should be to respond to big techs’ entry into financial services so as to benefit from the gains while limiting the risks”.
Chris Hughes, a co-founder of Facebook, last week published a lengthy op-ed expressing his concerns over the tech giant’s leap into finance with a warning that the way Libra is designed could shift power into a small group of organizations.
On the op-ed published on the Financial Times, Huges said: “If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies. If global regulators don’t act now, it could very soon be too late.”
Sen. Josh Hawley (R-Mo.) expressed his concern about Facebook expanding it’s monopoly: “We need to see exactly what their specific proposals are, but I’m very concerned about Facebook’s behavior on a range of fronts. I’m concerned about their size, I’m concerned about their anti-competitive conduct, I’m concerned about their rampant violations of privacy.”
While there are many calls to scrutinize and even halt the project, it is clear that Facebook has brought every concerned party to the table for a dialog.
Libra is coming, whether some entities like it or not, and it makes sense to figure out ways to make it work for all of us.