Katharina Pistor, Professor of Comparative Law at Columbia Law School, has been discussing the legal aspects of Libra. She said, “You can’t put the genie back into the bottle. Facebook’s Libra is designed to become a new global currency that will complement existing fiat currencies. It is designed as a for-profit currency of currencies.”
As Coindesk reports, Pistor went on to describe the governance model of Facebook’s Geneva-based cryptocurrency project as a “concentration of power… unmatched by any meaningful accountability to anyone.” However, it also added that this isn’t as terrifying as it sounds.
Pistor also explained that Libra could only be possible because of the existing regulatory infrastructure that supports fiat currencies. She told an audience during a Coindesk Q&A session that just as treasury bills and bank deposits are guarded by the reputation and “full faith of the United States behind” them, so too would Facebook’s stable cryptocurrency be ingratiated in the financial ecosystem. “[Facebook] can’t do this without the United States.”
Pistor told them that Libra had an “elegant design” that could make it cheaper than using fiat and provide a better system for many customers.” Her biggest question is “whether the central banks could actually offer something that’s more attractive?”
“I think the really important question is what is the benefit of doing it through a private agent rather than a public agent,” she said.