Reading time for the article: 3 minutes Compact: The Libra Association has already grown with two venture capitals. Now the organization is growing by another member, who is also a VC. Stablecoins are meanwhile coming under increasing political pressure. The Libra Association announced yesterday that Blockchain Capital welcomes another member on board. The umbrella organization is an amalgamation of now 27 different companies that are working together to realize Libra. The latest addition is a venture capital, which is known for having made some trend-setting investments in the past. Including in Ripple, Ethereum and Coinbase. The latter is already a member of the Libra Association, previously welcoming Temasek Holdings as a member, as well as Paradigm and Slow Ventures. As you build the network, it doesn’t necessarily get any easier to move Libra forward, although many aspects have already been defused. For example, the originally planned currency basket fell overboard because political resistance became too great.
Stablecoins are coming under increasing pressure
That the resistance of the top politicians has not been broken was shown recently at a meeting of European finance ministers in Berlin. On the fringes of the event, the finance ministers of Germany, France, the Netherlands, Italy and Spain made it clear that they wanted this market to be regulated much more tightly. One thought is consumer protection, although it is clear that the real concern is growing from Libra is. The initiative launched by Facebook harbors a lot of disruptive potential for monetary policy, even if it does without a currency basket and propagates a new self-image. Libra as a practical payment solution could overtake state currency and future state digital currency. In the worst case, the consequence would be a loss of control that you absolutely want to avert.
CBDC is urgently needed
The best cure for Libra would be a rock solid solution in the CBDC area. But it could take some time before the central banks issue a digital currency. Not to mention a digital euro that ends up in consumers’ wallets. The lockdown of politics offers extremely weak protection against the pressures of technological progress. If the states fail to use this wafer-thin lead that they can gain in terms of time, then in the end the whole system will suffer. One should bear in mind here that China has made the digitization of money a priority for society and thus also for the economy. The speed at which the Asian superpower could overtake the Europeans, but also the Americans, is probably hard to imagine for many politicians.