Governments outside of the West have shown similar reactions, if not outright denying the Libra a chance. The Reserve Bank of India (RBI, the country’s central bank), for example, decided last year that “entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [cryptocurrencies].” Seeing as how Facebook has not filed any application for an exemption with the RBI, it is highly unlikely that the Libra will make an appearance there. China and Russia, for their part, are highly unlikely to welcome a new cryptocurrency crafted by an American technology giant. Facebook is blocked in China at any rate.
What will happen next? It is hard to say. Perhaps the regulatory pressure will force Facebook to cancel the project. Maybe the company might opt to peg the Libra to the value of the U.S. dollar instead, essentially making it an extension of the greenback (though it would still face a thousand and one challenges, including the banking industry’s impending assault). Even if Facebook decided to do something as foolish as releasing the Libra on without addressing concerns, they would have to face what Louis XIV of France called the last argument of kings—the use of force. Even if people are distrustful of governments and their politics, what underlies fiat currencies is the belief that only nation-states have the legitimacy to wield the use of force as a way to enforce laws and impose order in a society.
Facebook has succeeded in at least one respect though: they have forced a conversation on tech sector regulation, the payments industry, cryptocurrencies, and most important of all, the monopoly that governments have enjoyed over the creation and distribution of currency—until now. Pandora’s box has been opened, and it is highly likely that other large corporate or noncorporate entities may borrow a page from Facebook’s playbook and consider the possibility of issuing their own, possibly more regulator-friendly cryptocurrencies. A new era in the world of monies is about to begin, for good or ill.
Carlos Roa is the senior editor of the National Interest.