Does the consortium of companies, initiated by Facebook, have the potential to dethrone sovereign currencies?
Not sure. But the individual will have to ask himself the question of the purpose of the project.
Amandine Cloot
The images scroll at full speed, taking you from Manila to Mexico City. “And if we returned the money
really accessible to all? What if we gave everyone the same financial opportunities? », whispers the voice
off. Welcome to a world where currency is exchanged as quickly as "a message typed on your
smartphone” and “for the same price”. Welcome to a world where 1.7 billion people who have no
not currently have access to financial services could progressively "be included" in the sphere
economic.
The one-and-a-half-minute advertising pitch is convincing: libra, why not? After all, we
are more than two billion people on the planet who have integrated Facebook, WhatsApp and Messenger
in our daily lives... The "monetary" ambitions of a consortium of private companies nevertheless deserve
to be specified.
A more financial asset
than a currency
Libra is presented by its initiators as a currency. It will not, however, technically
a. "The first question to ask is: Would you be willing to sell your home and get paid in
free? If the answer is no, then it is not a currency but a financial asset”, schematizes
Alexandre Girard, professor of finance at Saint-Louis University.
First consequence: a financial asset is not “guaranteed” by a sovereign authority. It is therefore by
essence riskier than euros lodged in a bank account. If libra crashes for either
reason, your "money" converted into a "token" will not be protected.
However, we speak of a "stable coin" - the name is controversial - because the virtual currency will be
backed by a basket of official currencies. In other words, for each libra created, euros, dollars,
pounds sterling… will be kept in return. The value of this asset will therefore depend on the
value of the portfolio to which it is attached. In short, in theory, it should not fluctuate strongly.
"Libra's long-term stability will be difficult to guarantee," said the professor of finance. "
Member companies will have to be ready to invest to compensate for any imbalance. If all the
world exchanges its libras in dollars while there are more euros deposited in the reserve, for example. »
A risk of influence
on sovereignty
The project certainly still lacks contours but, on both sides of the Atlantic, the political reactions "
anti-libra” fuse, proof that the consortium is taken very seriously by the authorities. Normal: currently.

e-currencies are only very little used (1% of the global money supply), but libra could
totally change the game. Remember that Facebook alone has 2.4 billion users. That in
in some continental countries, such as India, WhatsApp is already much more than just another messenger.
However, no official indication has yet been given on the balance between the various currencies which
will compose the reserve which will guarantee the libra. Some see in it, because of the strike force, a potential
a tool for destabilizing the monetary sovereignty of our States. “A priori, we will not pay our rent or
his taxes free. Our monetary policy instruments can also intervene in the event of
disturbances caused by international capital flows", however tempers the National Bank of
Belgium.
The emerging economies are particularly concerned here (and moreover directly targeted by the
ambitions of the consortium). In countries ravaged by inflation, one can easily imagine that the libra
becomes a safe haven for the population with, as a result, a risk of influence but also of dependence
(parallel to dollar exposure) on already weakened government currencies.
A tool to promote
a “marketplace”
The question of the purpose of the initiative must therefore also be raised. If libra is not as explained
above, a currency as such, its use will, by definition, be restricted to the perimeters of
platforms that initiated it. Really desirable?
Admittedly, its initiators position the project as “the new tool to promote financial inclusion”.
How? 'Or' What ? By facilitating money transfers, which are generally costly for individuals. From an angle "
more Western", the Colibra wallet (read below) is sold as an ultra-accessible instrument, at
intuitive use. More practical than a bank account or a credit card, in a way.
Have the digital giants suddenly become philanthropists? No. The business model –
the association has specified that it does not wish to be remunerated via a commission on each transaction - relies
simply on the network effect. “We can take the example of the Chinese giant Alibaba and its service
Alipay payment. The Alibaba marketplace is becoming essential,” argues Alexandre Girard. In
brewing up the exchanged currency, Facebook & Co make sure to reinforce the dependence of their
users such as those of professional third parties to their "platform".
The potential monetization of your financial data should not be forgotten either. Facebook promises
a total segregation between the use of private data for advertising purposes and financial data.
This does not exclude that one day, the company will offer you, on the basis of your behavior, products
"personalized" financial instruments, denominated in Libra.
We are far today from a libra which reigns over the world of payment. Especially as barriers
regulations have been established. But as Jean-Claude Trichet, former President of the Bank
European Central, recently in Le Soir: “Ignoring the phenomenon would be a mistake. Technologies
exist, they evolve very quickly and it would be naïve to oppose them on principle because these technologies will eventually
prevail. It's up to regulators to find the appropriate response.