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Libra is not a bank, it’s a currency that’s pegged to other currencies. The asset backing is only because the initial value has to come from somewhere. It can’t
by throwaway1777 7y ago
Libra is not a bank, it’s a currency that’s pegged to other currencies. The asset backing is only because the initial value has to come from somewhere. It can’t default. It could decrease in value, but there’s no debt or counter party risk.
- bobthepanda 7y agoA run on a currency is still pretty disastrous for everybody involved, hence the need for a bank of last resort to shore up the currency when that happens. All these alternative currencies look like they're solving a political science problem, not any actual problems that people have.
- htfu 7y agoA run on the currency just becomes a run on the underlying currencies, which, as a basket of global currencies, cannot all be run at once since each one is inherently relative to the others. Second point is right on the money though!
- novok 7y agoI'm thinking it's more about solving developing country problems vs. developed country problems. If your local currency is becoming zimbawbe, WhatsApp has a stable currency you can buy into with the local money changers and still is as convenient as mpesa.