Who Can trust FaceBook with their money?

For a long time there were rumors of Facebook gnomes slaving away working on a cryptocurrency. Funny names were rumored like the GlobalCoin. Or the Zuckerberg. Some people reckoned that it was all a joke. After all who would trust Facebook, of Cambridge Analytica fame, with their dough?

Here’s the Libra theory. You cash in your hard-earned kroners euros, dollars etc into the Libra reserve, which then “mints” an equivalent amount of Libras (at the prevailing exchange rate). If you want to cash out by returning your Libras, they are “burned” and you get the equivalent back in pounds, euros, dollars, etc. That way all of the available Libras at any point in time remain backed by the reserves held by the association. The idea is you can always get your real money back at a fair exchange rate.

All the central banks have spoken out if not actually attacked. This looks like the standard reaction of the established to an unruly rogue. But before you toss it off as the defensive huffing and puffing of the establishment fat cats, there are some serious questions. One: are we comfortable with the idea of a new global currency controlled by corporate bosses? At least central bankers are appointed by democratic administrations. Who elected Zuckerberg & Co. And secondly, the biggest question of all: what does Facebook get out of it? Who knows?  Rational economics seems to have left the world a while ago.