Thanks for writing this article. I think there’s another point of concern, however, which might be even bigger, especially for smaller governments.

According to some projections, the Libra Association has the potential, if successful, to collect a vast amount of deposits, larger than most existing banks (the Economist estimates they could reach $2 trn). That money would then be used to purchase government bonds, and only government bonds, unlike traditional banks who use deposits for other investments, starting from loans. When they reach a certain amount of holdings, they could become price-makers for those bonds, which would give them significant power over governments.

For example: imagine the Libra Association decided to buy a large amount of Greek government bonds. According to Wikipedia, as of March 2019 the government of Greece has less than $400 million in external debt; the Libra Association could easily buy a large chunk of that. At that point, their power over the government of Greece would be very high: just a threat from the Libra Association to dump their bonds would cause turmoil in the market, potentially disrupting the finances of the entire country. It’s concerning how this could let a bunch of private corporations have strong power over elected governments.

The fact that financial markets are able to influence governments isn’t new, and it’s especially a danger for those governments with high debt-to-GDP ratio. During the last recession, market forces were successful in making governments fail (or at least they strongly contributed to that) in multiple countries, starting with Greece and Italy.