Facebook's Virtual Currency Libra is Similar to "Wild Cat Bank"

According to Marcus, CEO of Facebook at the House of Representatives Hearing on Thursday said, "about 50 percent of Libra's proven assets include the U.S. dollar (USD), the euro (EUR) as a legal currency, the GBP (GBP) and the Japanese yen (JPY), and other basket-type currencies."

Congressman Katie Porter pointed out that it is similar to the so-called Wild Cat Bank, which existed in the early 19th century.

Wild Cat Bank refers to the "Free Bank Era," a trend in which liberalization of banking services occurred in 1836 when the federal government temporarily retreated from banking regulations after the second U.S. bank's charter renewal was denied. In the meantime, the issuance of banknotes was liberalized and companies and individuals besides banks were able to issue banknotes. Wild Cat Bank is a term referring to the issuer of the bill.

At that time, the Wild Cat Bank issued banknotes promising to exchange with Gold, but they rarely carry out the actual exchange. Representative Katie Porter argued that the virtual currency Libra is similar and it is questionable how much trust it can give after issuing the virtual currency.

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