shadow-banking

The chapter critically examines Facebook's Libra project through its white papers, revealing ambitious goals of creating a global digital currency for financial inclusion but exposing significant flaws such as centralized control, lack of true decentralization, and unresolved blockchain scalability issues. It highlights the Libra Association's governance structure and the synthetic nature of the Libra token as a shadow banking instrument, while emphasizing the ideological motivations rooted in libertarian and anarcho-capitalist ideals that challenge regulatory frameworks and pose risks of economic destabilization through Libraisation.

The chapter examines Facebook's Libra stablecoin project, focusing on the design and scale of the Libra reserve, which aimed to back the currency with a basket of national currencies and low-risk assets. It highlights significant regulatory challenges and systemic risks, including Libra's potential to operate as a shadow banking system without proper oversight, its massive reserve rivaling sovereign wealth funds, and the threat it poses to monetary sovereignty and financial stability. European regulators' resistance and concerns about capital controls evasion and the difficulties of managing stablecoins in low or negative interest rate environments underscore the broader economic and policy implications.