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Gonzalo Huertas, Joseph E. Gagnon

Articles by Gonzalo Huertas, Joseph E. Gagnon

Facebook’s Libra Currency Could Bring Benefits but also Risks for Developing Countries

December 12, 2019

Anxiety about Libra, Facebook’s proposed digital currency, continues to grow among policymakers worldwide. A recent report commissioned by the G-7 warns that stablecoins—digital currencies backed by assets with a stable value—that are adopted on a global scale could pose a challenge not only to monetary policy but also to the international monetary system itself.
For developing countries, Libra could bring significant benefits as well as risks: It could provide financial inclusion and cheaper international transfers for hundreds of millions of people but, at the same time, could weaken developing countries’ currencies and amplify financial panics. If Libra does eventually achieve its aspirations of global adoption, it would not be surprising for emerging markets and developing countries to

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