Because it's a hard job.

It's a bit like being president.

There just aren't a lot of other people

who understand what you're going through.

So they meet, in Basel, in Jackson Hole, in Washington,

and they talk about stuff that bothers them.

At the annual meeting of the IMF this year

they spent a lot of time talking about Libra.

And that's because Facebook is about putting power

in people's hands.

This is Facebook's plan to create

a new global digital currency backed by a reserve of existing

assets, like dollars and euros.

Central bankers didn't used to think

they had to think about digital currency.

Then Facebook announced Libra.

Now they have to think about it.

Maybe it has sort of gelled during the summer

because we ended up with a lot of conversations

about Libra, because Libra kind of showed up,

at least from a central bank perspective, kind

of out of the blue.

But to me this conversation was not new at all.

And that's because in my country we

are moving rapidly out of cash under all circumstances.

So we have had good reasons to think about these things.

Central banks are thinking hard about Libra for two reasons.

First, is scale.

There are other stable coins, digital money like Libra,

backed by existing currencies.

But Facebook is massive.

And it's everywhere.

This is why Mark Zuckerberg had to testify

before Congress about Libra.

Facebook is big, and big is scary.

The Libra Stable Coin Project stands out

for the speed with which its network could

reach global scale in payments.

It wasn't an accident that Lael Braynard

gave that speech in Washington the same week

as the IMF meetings.

She was sending a message.

Yes, Facebook, we are talking about you

when you're not around.

And we're not saying good things.

What sets Facebook's Libra apart is the combination

of an active user network representing more than a third

of the global population, with the issuance

of a private digital currency opaquely tied

to a basket of sovereign currencies.

It should be no surprise that Facebook's Libra is attracting

a high level of scrutiny from lawmakers and authorities.

Libra is going to be backed mostly by dollars.

And I believe that it will extend

America's financial leadership around the world,

as well as our democratic values and oversight.

So that's the second thing that bothers central bankers.

Libra wouldn't use existing regulated currencies.

It would use them to create its own.

The biggest risk there is to smaller economies,

where there's already a tendency to dollarise,

to save physical dollars.

A new global currency could accelerate

dollarisation, or Libraisation.

If a stable coin is not issued in the currency of the country

where it is going to be used, so for example, the Caribbean say,

it could be that this is taking over the majority

of transactions.

And at that point, the central bank

is losing control of monetary policy.

So dollarisation is a real risk.

The vehicle where you could get the big changes

are the platforms like Facebook, with over two billion people

using it.

And there was a lot of nice approaches

within the Libra coin where you could see lots of value.

The difficulty for central bankers

is, how do you regulate something like Libra?

I think Facebook hadn't thought through carefully

how important control of currency

is for governments and for central banks.

Ultimately, the question here is, who

gets to decide what money is?

Countries have been fighting for several hundred years

to control the supply of money.

They're not going to give it up just because Mark Zuckerberg is

ambitious.

The financial industry is stagnant

and there is no digital financial architecture

to support the innovation that we need.

I believe that this problem can be solved, and Libra can help.

Public sector has always had a say when it comes to money,

so it's hard to imagine that you create

sort of entirely private monies, using the plural.

And if history gives us any guidance

those types of arrangements tend to collapse sooner or later.

That's why we have central banks.

When private companies create their own money,

there can be innovation, but there can also

be pretty destructive consequences.

Central bankers know this.

And that's why when they hang out these days, sometimes

they're gossiping about Facebook.