Wired UK - 11.2019

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but consumers might start exchanging

their dollars for Libra in order to pay

for goods and services provided by

Facebook and its partners – which

include e-commerce site eBay and

music streaming service Spotify. If a

third of the world’s population did this,

Facebook and its partners would have

in effect established its own financial

system, run according to rules it deter-

mines and subject to no government.

Of course, Libra would still depend on

government currencies to remain stable.

But that doesn’t mean governments

could control it. Quite the contrary.

The Libra reserve would be the largest

investment fund on Earth, dwarfing even

the sovereign wealth funds of oil-pro-

ducing nations. Buying and selling assets

to keep Libra’s value stable would move

currency and government bond markets.

And since it would out-gun central banks

• even the mighty US Federal Reserve –
  there would be little governments
  could do to protect their economies.

The Libra reserve could also influence

government policy. It could ditch assets

in currencies issued by governments

whose policies the Libra Association

disapproves of. Attempts to control

Libra could result in a collapsing

currency and rising borrowing costs.

Again, this is nothing new: big banks

and their representatives have been

trying to influence government policy

for years. But the Libra reserve would

have greater market-moving power

than any bank, past or present. Some

academics have expressed concern

that Libra could grow so large that

central banks would be forced to bail

it out if there were a run on its reserve.

My concern, however, is not so much

what central banks might do in the

event of a run on Libra, but what govern-

ments might have to do to prevent one.

Back in 2012, the Bank for Interna-

tional Settlements proposed that major

governments should both produce

enough debt to keep financial markets

functioning, and preserve the value

of that debt through cuts to public

spending and austerity measures. The

Libra Association could similarly insist

that governments not only produce

enough “safe assets” to maintain

Libra’s peg, but prioritise maintaining

the value of those assets over the

wellbeing of their populations. And if

the Libra reserve achieved dominance

in financial markets, governments

might have no choice but to comply.

If Libra became the world’s transaction

currency, and its reserve became the

dominant player in financial markets,

the Libra Association would

have the power to allow or

deny people the right to

transact – something that

is currently a government

prerogative limited by

democratic safeguards. It

could exert that power not

only over individuals, but

other companies and even

governments. The Libra

Association could break a

company that refused to use

Libra, or punish a recalcitrant

government by denying its

citizens access to the transaction services

enjoyed by a third of the world’s people.

Many have dreamed of a single global

currency that would enable people to

transact with each other seamlessly and

instantaneously. But if the only way of

achieving this is for an unaccountable

corporate elite to replace democrati-

cally elected governments, surely that’s

too high a price. Frances Coppola

PHOTOGRAPHY: ALAMY

F

THE NEW TASTE OF

SUSTAINABILITY:

MAKING BUG PROTEIN

DELICIOUS FOR FISHES

armed salmon are

surprisingly picky

eaters. Feed made

from protein-

rich milled black soldier fly

larvae (fed on supermarket

food waste) is better for

the environment than the

estimated 215,385 tonnes of

fishmeal consumed annually

by Scottish salmon – but the

fish find the carcass remains

hard to digest, says Fotis

Fotiadis, co-founder and

CTO of Cambridge-based

startup Entomics. He claims

the current process is also

wasteful – like cooking and

drying an entire cow to make

a single protein shake.

To break down the nutrients

and produce a more digestible

feed, Entomics has patented

a post-processing technique

using microbial fermentation,

dubbed Metamorphosis.

The boiled larvae are

processed automatically: first,

separators winnow out chitin,

a fibrous substance making up

the insects’ body wall; another

machine isolates the proteins

and fats for fermentation;

finally, the fermenting mix

is stirred in with bacteria and

yeast, which break proteins

down into amino acids that can

be converted into a dry powder.

The four founders of

Entomics, all graduates from

the University of Cambridge,

came up with the idea when

they entered a competition

to find a way to reuse food

waste. They won, and launched

Entomics to realise their

university project, which is

now ready for deployment at

insect farms. Tuck in, fishies...

Sabrina Weiss entomics.com

‘Libra could grow

so large, central

banks would be

forced to bail it out’

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