At Hacker Noon, the Committee’s Stephen Moore and Ralph Benko together with Everipedia CEO and co-founder Sam Kazemian explain three fatal design flaws of Facebook’s Libra and the superiority of their own stablecoin Frax and the implications for the US dollar:
The Libra-denominated price of everything will vary daily, even hourly. When we pull up to the pump the price of gasoline might be 3 Libras per gallon. It might be 3.01 Libras per gallon by the time we top off the tank.
This is hardly catastrophic. Yet this is almost certain to prove chronically annoying. It is not optimal for commerce.
Libra’s insistence on 100% reserve backing rather reminds us of a trope used in the Beverly Hillbillies. Jed and Granny would pop into the bank to see and count their money.
It is unnecessary – and retrograde – to maintain a 100% reserve.