If Facebook’s currency isn’t stopped, we will all pay the price

The social media giant has unveiled Libra, a cryptocurrency payment system that, if it fails, could take down the global economy. Governments must intervene, says Katharina Pistor.

Facebook has just unveiled its latest bid for world domination: Libra, a cryptocurrency that can be used as private money anywhere. Facebook CEO, Mark Zuckerberg, has been in negotiations with central banks, regulators, and 27 partner companies, each of which will contribute $10m (€8.8m).

Facebook has avoided working directly with any commercial banks. Zuckerberg understands that technological innovation alone will not ensure Libra’s success. He also needs a commitment from governments to enforce the web of contractual relations that underpin the currency, and to endorse the use of their own currencies as collateral.