3 ms·
>FB's coin will be at the mercy of the Fed and ECB Only if the currency flows out of traditional Fiat and into Libra don't substantially affect currency prices
by elif 7y ago
>FB's coin will be at the mercy of the Fed and ECB
Only if the currency flows out of traditional Fiat and into Libra don't substantially affect currency prices or the effect is more or less universal.
For instance, if the euro loses 10% value in a given period of time while 3 other equally weighted currencies are relatively stable, libra would lose ~2.5% value in that time. Given the low risk this seems like an obvious hedge if you are heavy in euro, and momentum could easily snowball.
- buboard 7y agoit could also work the other way, e.g. that the basket loses more than the USD . I dont think overall there is any benefit , but maybe there is overall reduced volatility or risk. I don't know if the central limit causes a reduction or increase of risk here. It seems like the index fund of currencies.