“Game Changer” – Is Libra The Trojan Horse For An SDR-Backed Redesign Of The Global Financial System?

Thursday, June 27, 2019
By Paul Martin

by Tyler Durden
Thu, 06/27/2019

Some have proclaimed Zuckerberg’s dive into digital currencies as (one of) the drivers of the recent renaissance in cryptocurrencies (as scale goes to the mainstream); others fear Facebook’s Libra is a ‘trojan horse’ to centralized (not de-centralized) control of billions of people’s wealth and an acceleration of the push for a cashless society (as rate go negative almost globally and policy-makers lose control of the status quo).

Rabobank’s Wim Boonstra breaks down the arguments on both sides, arguing that Libra could be “potentially a welcome addition to the financial system” but ending on an ominously totalitarian note…


A consortium led by Facebook recently announced the introduction of a new cryptocurrency, the Libra. Unlike most other cryptocurrencies, the Libra will be fully covered by financial assets. One of the aims of the Libra is to connect billions of people who do not yet have access to financial services to the financial system. The effects of the Libra will therefore first be felt in emerging markets, but soon this crypto can also manifest itself elsewhere. If the Libra actually gets off the ground, it potentially also has a greater impact on the financial system than other cryptos.


A consortium led by Facebook recently launched an initiative for a new crypto currency, the Libra. The first reception in the media and with politicians was quite sceptical, even verging on hostile. This is related to the poor image that Facebook has built up in recent years. The combination of the name ‘Facebook’ and the words ‘new cryptocurrency’ in one sentence seems to trigger a lot of emotion. Which is a pity. Because the Libra is not a typical cryptocurrency and, just as important, Facebook is only one of many initiators of the Libra. Studying the underlying documents shows that this is a very interesting initiative.

To begin with, the consortium that was organized by Facebook, the Libra Association, is certainly impressive. It includes a number of large, reputable companies in the field of payment transactions (Mastercard, Visa, Paypal), new business models (eBay, Uber), telecommunications (Vodafone) and Fintech. All in all, there is a lot of knowledge behind this initiative. Partly because of this, at first glance the concept of the Libra seems to be more intelligent than many other cryptocurrencies. For example, Bitcoin was immediately said to be technically advanced, but economically obsolete (Economist, 2011). This criticism does not apply to the Libra, as the economic side has also been carefully considered. More on that later.

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