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Regulators Should Let Consumers and Merchants Decide the Fate of Facebook's Cryptocurrency

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Washington, DC -- Facebook, Inc. today released a white paper outlining plans to launch a new cryptocurrency named “Libra.” According to the white paper, Libra would be built on secure blockchain, overseen by an independent body, and backed by assets held in reserve.

CEI senior fellow John Berlau said:

“If successful, Libra could have benefits for consumers and small businesses in reducing the transaction costs of electronic payments, but the success of Libra is not guaranteed. Like other cryptocurrencies, it will face many challenges of which the most important is establishing trust in a community of users.

“In this and all sectors of the economy, the government should let the market work - neither favor nor place undue burdens on Libra or its competitors. Regulators should scrap regulation, such as deeming many cryptocurrencies as ‘securities,’ that could be cost-prohibitive to smaller innovators and entrepreneurs and have the effect of favoring big firms like Facebook. Let’s let consumers and merchants decide which cryptocurrencies and payment systems work best for them.”

CEI research fellow Patrick Hedger said:

"The fact that Facebook is spearheading the effort to launch a global cryptocurrency is a cause for celebration, not concern. This is a perfect example of why current anti-big tech rumblings are so misguided. Big isn't bad. Big ideas that stand to benefit us all come with big risks and oftentimes require backing by individuals and firms with enough resources to both execute the idea and accept the consequences of failure.

"Those that cheer such ventures as commercial spaceflight companies and charities founded by billionaires ought to also welcome Facebook's efforts to extend the benefits of cryptocurrency to the masses. Facebook’s venture may or may not be successful, but they should be commended for trying, and certainly not stopped or hindered from doing so by regulators."

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