Libra and the Others: The Future of Digital Money
The current debate about cryptocurrencies is evolving around the proposals of big-tech corporations developing their own digital currencies, which have the potential to reach scale very quickly. Three ongoing projects – Facebook’s Libra, Telegram’s Gram and the Walmart Units – shed light on the different economic rationales behind the launch of a digital currency by large private companies with different business and political approaches. Walmart hopes its digital currency will improve the efficiency of its ecosystem by engaging consumers while saving on interchange fees. Facebook’s and Telegram’s digital currencies have the ambition to become global currencies. The development of private digital currency poses a number of risks related to the stability of the banking and finance systems as well as oversight. The regulatory approach towards these three projects will set a precedent that will influence other private giant corporations. There is a need to address regulatory gaps within the existing frameworks at an international level because domestic public policy risks being inefficient in mitigating potential challenges.
Paper prepared in the framework of the IAI-Intesa Sanpaolo Partnership, November 2019.
1. Large tech corporations and digital currency
2. Walmart, the dream of being an everything shop
3. Facebook/Libra vs. Telegram/Gram: different twins
4. Regulatory issues and risks