Facebook’s Libra: Virtual Fiat

Facebook sponsored the Libra Consortium which consists of a couple dozen of the most powerful internet players, like Google, PayPal and Uber.

The article re-posted here, written by yours truly, explores the idea that the Libra is the antithesis of market-generated currency, and was just published at Mises.org:  “It’s No Bitcoin: Facebook’s Libra Currency Is Tied to Government Currencies

“Nobel laureate F.A. Hayek was, as he says in the 1990 introduction to his Denationalization of Money: The Argument Refined, one of the chief “gold bugs” of the 20th century. And he reminded us, so long as politicians want to control money, gold-backed currency is essential to protect our liberty from the politics of inflation. …

“Hayek predicted that normal market forces would apply to the goods we use to facilitate exchange (“currencies”) if only governments would get out of the way. In a free market for money he suggested that major financial institutions would sponsor competing currencies, probably defined by “baskets” of commodities. He speculates on how the market would maintain the value and stability of such currencies, far better than any political system of legal tender. …”

Contrary to Hayek’s formulation for monetary stability,

“Facebook and Libra’s cooperating founding organizations (including PayPal, Visa, Uber …) hope to provide a stable cryptocurrency by tying it to a group of government currencies! … Well, that’s it. Zuckerberg is no Hayek. And the Libra is no Bitcoin.”

Read the full article here:

https://mises.org/wire/its-no-bitcoin-facebooks-libra-currency-tied-government-currencies

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