"Facebook has announced plans for a new digital currency that has raised hackles worldwide. The social networking company hopes to offer an alternative to money issued by governments. Libra has been unveiled at a time when the Bitcoin mania has petered out, its recent bounce notwithstanding. Bitcoin may have been an attractive investment asset for early investors, but this column has earlier pointed out some fatal flaws in its design that make it unviable as an alternative monetary unit.
Modern economies are built on the bedrock of monetary stability. You will enter into a long-term contract only if you are pretty certain that the unit of currency you will be paid in will have the same value at a later date. Bitcoin prices have bounced around with gay abandon. Would you sign an annual wage contract with your employer in a cryptocurrency if you are not certain what its purchasing power will be through the period?"
Read the full article here.