Those corporations who would get involved with the project of the digital currency called Libra being planned to be launched by the social media company Facebook could get undue advantage to getting greater power than the nation states, warned one of the co-founders opf ted social media platform.

The comments were made by Chris Hughes who currently has a net worth of an estimated at $430 million because of his involvement with Facebook in the social media platform’s early days. Hughes said that the progression and growth of cryptocurrency should be slowed down by intervention by global regulators.

According to announcements made by Facebook, it is currently in the process of development of its cryptocurrency called Libra from a base in Switzerland. This project by Facebook is being partnered by 27 other corporations which includes the likes of Mastercard, Paypal, Uber and Vodafone. All of the partners are collectively called Libra Association.

“If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies,” said Hughes, a co-chair of the Economic Security Project, an anti-poverty campaign group. “If global regulators don’t act now, it could very soon be too late.”

In a speech given at the annual Mansion House dinner on Thursday night, a cautious welcome to Libra was given by Mark Carney, the governor of the Bank of England.

The capacity to “disrupt and weaken” nation states could be achieved by all or some of the companies and corporations that are involved in the Libra Association, said Hughes in an article written by him for the Financial Times. Each of the companies involved in the project have made contributions of $10 million into the Libra cryptocurrency project.

Governments of emerging economies would find it difficult to control and manage their fiscal policies in case a large number of people from such economies started to trade in Libra instead of the local currency, Hughes warned. He further suggested that there should be a temporary ban imposed on the banks and payment processors accepting the currency in such emerging markets by the regulators and government till such time that the associated agencies are able to evaluate the implications of the use of Libra.

“What Libra backers are calling ‘decentralisation’ is in truth a shift of power from developing world central banks toward multinational corporations and the US Federal Reserve and the European Central Bank,” he said.

The companies involved in the Libra project – including Facebook, would be able to gain undue advantage and say on the processes of development of critical global technologies such as identify verification and would also have the upper hand in matters related to formation of rules and regulations such as privacy and response to theft, in case the project of LKibra is a success for Facebook, Hughes added.

“The company’s decision to offer live broadcasting made it possible for teenagers to stream bullying, terrorists to live cast an execution and a gunman a mass shooting,” Hughes said. “It has similarly transformed mobile messaging and news and journalism faster than many imagined.”

(Adapted from TheGuardian.com)

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