April 28, 2020 Libra’s new systems do not adequately address currency substitution concerns, argue two professors.

Barry Eichengreen, a previous economist and policy advisor for the IMF and Ganesh Viswanath-Natraj, Assistant Professor of Finance at Warwick Business School published an article on Saturday in which they criticized the design of the Libra project. The authors claim that the new Libra whitepaper, published in April, does not address currency substitution, futures, or the provision for a lender of last resort and that their proposal for a capital buffer is too vague. In their concluding remarks, Eichengreen and Viswanath-Natraj state that the project has introduced systems, namely “redemption stays” that resemble the “clearinghouse certificates” of the banking system that were phased out after the creation, in 1913, of the Federal Reserve System.