The monetary policy of the currencies underlying libra are also fully determined at the behest of their respective nation states (or centralized monetary authority in the case of the EU). So, actually not that flawed. Governments and central banks are foolish to not get behind something like this because the alternative is something they can't influence at all like Bitcoin which maintains no peg to anything they do.
Libra is still a problem. They start with a basket of USD + Yen + EURs to start. This appeases governments, just for the reason you mention "based on their currences".
...but Libra is designs that they can move away from them over time. It can move to revenue generating investments, like corporate bonds (like money markets do).
Libra can then wait until closer to countries defaulting on their national debt. The countries then start money printing at far higher rates. Their currencies drop in value (aka far higher inflation rates). Libra then shifts to corporate bonds and revenue generating assets.
This is good for citizens. It moves Libra from unsound money (USD + Yen + EURs) to sound money (asset backed & revenue generating assets). That makes Libra more powerful than bitcoin.
This becomes a strategic problem because it can cause a RUN on the national fiat currency, as Libra flees it. Libra then is infitely better than national's fiat currency, because Libra is asset backed. The US Dollar has about $0.03 worth of gold backing per $1.00 (after all of the money printing).
Yes, Bitcoin is relatively speaking a pure idea. It competes in the realm of other pure ideas. At least, if we are unmooring ourselves from national identity it is a clean break with new dangers and new opportunities.
Libra is an idea AND a political entity, which feels like some mixture of status quo and new world which makes me uncomfortable.
What would the assets generate revenue based on? If it‘s fiat currencies you still have exposure, if it‘s Libra you run the risk of currency panic and it‘s not dissimilar to a fiat currency panic except there‘s nothing really available to stop precipitous economic effects.
Gov bonds, corporate bonds, REITs, that today all pay USD, or Yen, or Euros, or what have you. So still based on fiat. Except this revenue basket just looks like an opaque, complex security, and we saw how well that turned out during the last financial crisis.
i don't think the goverments are foolish in this regards.
What are the advantages of libra compared to a normal bank transfer inside the bank union? Almost all positive aspects of libra already exists in the eurozone thanks to SEPA.
From an american perspective libra seems like an improvement, but the US is decades behind compared to the rest of the world when it comes to banking.
