Marcus addressed regulators’ fears that the social media giant’s planned stablecoin could potentially disrupt central bank monetary policy and destabilize the global financial system.
Such concerns have ostensibly been fuelled by the stablecoin’s potential exposure to 2.7 billion monthly users of Facebook’s three wholly-owned apps — WhatsApp, Messenger and Instagram.
“Each Libra is deposited one-to-one with traditional currencies and no new money is created. There is no impact on interest and yields. In this sense, the Libra reserve cannot disturb monetary policy either. In any case, it is unlikely that users will pay for an espresso […] with Libra in the future. Instead, they will use it where it offers benefits, such as international payments or for micro-payments.”
By contrast, the executive said he anticipated the digital coin would initially “see acceptance problems rather than regulatory ones,” noting that consumers would need some time to properly grasp what they can use Libra for. He added that the network would likely see “considerable frictions” at its inception, due to the need for interested parties to undergo robust identification procedures.
As reported, Facebook CEO Mark Zuckerberg has spent the past week in Washington D.C. for a series of meetings with policymakers to discuss internet regulatory matters such as privacy, competition and its handling of political content.