It?s one thing for academics in Asia to rant against the tyranny of the dollar, or to make cheery forecasts about its impending eclipse by the Chinese yuan. But now that Facebook Inc. wants to spawn a new global currency ? one that could meet the ?daily financial needs of billions of people? and perhaps rival the greenback one day ? central banks in Beijing, Jakarta, Manila or Mumbai won?t exactly be ecstatic.
To them, the prospect of being at the mercy of a cabal of tech czars and venture capitalists sitting in Switzerland could well mean swapping the yoke of the U.S. Federal Reserve for a less predictable and potentially more sinister dependence.
What if Facebook?s crypto, backed by fiat-currency assets and offering stable value, starts out by paying for coffee but over time becomes people?s preferred store of wealth? What will it mean for monetary sovereignty? Suppose users of Libra, as the currency will be called, manage to set aside their outsize privacy concerns with Facebook. Were the tokens to take off and ? against all regulatory odds at home and abroad ? gain global acceptance, there will be several implications for governments around the world.