HomeCryptoAccording to a French economist Libra is a Ponzi scheme

According to a French economist Libra is a Ponzi scheme

The French economist Jean Peyrelevade has stated that he considers Libra a Ponzi scheme. 

Peyrelevade was a professor of economics at the École Polytechnique from 1969 to 1994, wrote several books on the evolution of contemporary capitalism and has been working with the European Investment Bank since 2004. 

Recently, he published an article in LesEchos in which he clearly defines Libra as a Ponzi scheme. He also states that Facebook’s money creation project represents a global systemic risk to the economy. 

In fact, he even compares Facebook founder Mark Zuckerberg to John Law, the Scottish financier who opened a private bank in 1716, considered by Peyrelevade to be a predecessor of Charles Ponzi. 

Law’s bank-issued banknotes for the first time in 1717, with guaranteed conversion into gold. However, the amount of money issued by the bank far exceeded the gold reserves, and when in 1720 the major owners of his banknotes requested the conversion into gold, the bank went bankrupt. 

In the eyes of Peyrelevade, Zuckerberg is more dangerous than Law, because his project is global, not national, and because Facebook has two billion users. Moreover, according to the French economist, the founder of Facebook could have been satisfied with creating one or more banks, using existing currencies, so he wonders why he chose to create his own currency. 

The answer he gives is that Zuckerberg is looking for ever more power and wealth and that to do so he wishes to have ample freedom of action. To open a bank, instead, would mean entrusting capital to the control of the regulatory authorities. 

That is why he might have created Libra, a private currency that escapes the sovereignty of states and their central banks. At this point, Peyrelevade calls for a total ban on the issuance and use of Libra. 

The economist argues that Libra will not be covered 100% by currency reserves. He says that foreign currency reserves will be used to make profitable, riskier and less liquid investments than the currencies themselves. 

For this reason, he defines this as a pyramidal Ponzi scheme, which will sooner or later collapse. 

In reality, the Libra Association, which is not composed only of Facebook, has already announced that it intends to maintain 100% coverage of reserves and that it intends to entrust the task of verifying this to those regulatory authorities that, according to Peyrelevade, would instead be kept away from the project. Indeed, it has been publicly announced that Libra will not be released on the market until the US and EU regulators themselves have given their green light. 

 

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".
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