"I want to be clear, this is not an attempt to create a sovereign currency". The number one of Facebook claims it, Mark Zuckerberg, referring to Libra, the digital currency proposed by Facebook, in the text that will present tomorrow to the financial services commission of the US Chamber. According to Zuckenberg Libra "will extend America's financial leadership".

“As we discuss these issues, the rest of the world is not waiting. China is moving quickly to launch similar ideas in the coming months, ”Zuckerberg said in his remarks. “Libra - he adds - will be mainly backed by dollars and I believe it will extend American financial leadership as well as our democratic values ​​and oversight around the world. If America does not innovate, our financial leadership will not be guaranteed ”.

Without US approval, Facebook will not be part of the project

The Libra project will not start in the world without first consent from the United States, Zuckerberg later assured. The Facebook founder will delay the launch of the digital currency until the regulatory issues raised by Congress are addressed. "I want to be clear - reads the text - Facebook will not be part of the launch of the Libra payment system anywhere in the world until the US regulators approve".

“This is not an attempt to create a sovereign currency - wrote Zuckerberg in his remarks - like the online payment systems now in existence, it is just a way for people to transfer money. Monetary policies are decided by central banks and not by Libra. The 'Libra Association' has no intention of competing with any of the sovereign currencies or entering the monetary policy arena. He will work with the Federal Reserve and other central banks in charge of monetary policy to make sure this happens ”. Libra, he continued in his reasoning, “was created with the intention of guaranteeing economic security and stability”.

La Libra Reserve, and congressional reassurances

"Libra was created with the aim of respecting economic security and stability, and will be fully supported by the Libra Reserve," Zuckerberg writes in the text. The Libra Reserve is the mechanism studied by the Libra Association to stabilize the price of the digital currency.

Libra is a stablecoin, a cryptocurrency which, however, is not subject to large price variations such as Bitcoin or Ethereum. Its stability is due to the fact that it is anchored to a basket of currencies and accumulates liquid and stable reserves, such as government bonds. For each Libra 'created' by the blockchain technology that supports the project, an asset of equal value will be deposited. And the US dollar, reads the text of the letter from the Facebook founder, will be the most represented currency in the basket of currencies.

Zuckerberg in his speech acknowledges that Facebook has failed in the past in data protection and privacy, and that this has led many to think that "we are not the ideal messengers right now", but argues that the Libra project will ultimately benefit many people, including those who are currently outside the banking system: “The Libra project is designed to promote financial inclusion through a secure, cheap and efficient system for sending and receiving payments around the world. Research shows that access to financial services helps people improve their poverty, and is particularly useful for women in developing economies ”.

Source Agi