If you haven’t heard about Libra yet, it’s about time. Facebook’s recently unveiled coin, which is held stable by backing it with other currencies and debt obligations, might cause significant changes in the financial system as we know it. The U.S. House of Representatives called for a halt of Libra’s development in an open letter to Facebook. Are U.S. regulators overreaching? Or is their approach warranted? Read it here.
The differences between traditional banking and blockchain banking are immense. The issuance and administration of stable coins impose substantial risks if not regulated properly. In this essay, the inherent risks posed by the uncoupling of formerly inseperable banking functions are explored and the argument is brought forward that the model of current stable coin regulations sounds the death of the ‘trustless’ promise of the blockchain dream.