Libra currency basket must be simple, transparent and public

I have read the documentation of Libra, and one thing I recommend is that the currency basket used which is determining the Libra be transparent. The idea of a monopoly currency basket where only an organization knows its composition is against the whole idea of an open source currency. Other institutions should be able to REPLICATE the Libra easily.

An example: One can make a currency basket out of the S&P 500 Index, or the connected SPY Exchange Traded Fund (ETF). If the S&P had decided to keep a monopoly, the indexing market would never take off; however, they released the index publicly so many entities could replicate it and release ETFs or mutual funds based on it. The same should be done with Libra.

Another example: The IMF’s SDR is a currency basket, and one can make a currency on that. It is great; but too US dollar heavy. An index needs to be representative of the world, and after it is done, it will take a life of its own. This is how the Euro evolved from the German Mark, French Franc, etc.

I myself created a currency basket, calling it the Smith Unit (in honor of Adam Smith) and released it open source (in 2017). You can find the details here. I cover in more detail how currencies are born and how a Libra like currency should evolve (the Smith Unit has 20% each of the USD, Euro, JPY and Chinese Yen, and 5% each of Brazilian Real, Indian Rupee, British Pound and Swiss Franc). The fear element in the public will go away if it is a transparent index, easily replicated, and run parallel to government currencies in the beginning. It should also be easily convertible-so one can change back to their favorite currency quickly and without friction. A lot can be learned from the Euro and how it became popular in Europe.

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