Facebook’s ‘Stablecoin’ Punt Raises Questions for Regulators
A debate has erupted in central bank circles about how to respond
By Gillian Tett
A profound paradox has enveloped global commerce. On the one hand, it has become absurdly easy and cheap for consumers to push data around the world at lightning speed. But on the other, it has remained oddly expensive — and slow — for those same consumers to move money across the globe.
Might this change? Facebook officials hope so: next week they will unveil a white paper outlining ambitious plans to create a new global cryptocurrency system with partners.
The details of this project, codenamed Libra, have been kept secret. However, reports suggest that the project will involve a crypto “stablecoin” that should allow consumers to make payments as seamlessly as posting a kitten photo, even if they do not have a bank account. That, at least, is the hope.
At first glance, this may sound crazily audacious, even for Mark Zuckerberg, the Facebook founder. After all, the word “cryptocurrency” is normally associated with the controversial bitcoin token, and Facebook has never shown the slightest desire to behave like a regulated bank.
