M-RCBG Senior Fellow-Led Study Group: Tim Massad
The Future of Money? Facebook's Libra and Central Bank Digital Currencies
November 19, 4:00 – 5:30, *NEW VENUE: OFER-401*
Facebook's proposal to create a new global currency and payment system--Libra--has provoked strong reactions. Rarely do President Trump, Chairman Jerome Powell of the Federal Reserve Board, and Democratic Congresswoman Maxine Waters, the chair of the US House Financial Services Committee, agree on anything, but all have expressed opposition or at least concern. Some bitcoin proponents view it as a betrayal of the promise of bitcoin, because of its centralized, permissioned-based structure, while others think the idea will be launched by someone, even if Facebook does not succeed. While the proposal faces many obstacles, it must be taken seriously because of Facebook's size and resources.
The proposal has reportedly caused the Chinese government to speed up its plans to introduce a central bank digital currency (CBDC), which is expected to be launched in the near future. Many other governments are considering CBDCs, and some have already run pilot programs. There may be other private entities which try to launch currencies.
Is this the future of money? Which of these initiatives are likely to succeed? What are the economic and political issues raised by these proposals? Can digital assets help us achieve greater financial inclusion, as Facebook and others have claimed? The study group will discuss these and related issues.
Timothy Massad is currently a Senior Fellow at the Kennedy School of Government at Harvard University and an Adjunct Professor of Law at Georgetown Law School.
Mr. Massad served as Chairman of the U.S. Commodity Futures Trading Commission from 2014-2017. Under his leadership, the agency implemented the Dodd Frank reforms of the over-the-counter swaps market and harmonized many aspects of cross-border regulation, including reaching a landmark agreement with the European Union on clearinghouse oversight. The agency also declared virtual currencies to be commodities, introduced reforms to address automated trading and strengthened cybersecurity protections.
Previously, Mr. Massad served as the Assistant Secretary for Financial Stability of the U.S. Department of the Treasury. In that capacity, he oversaw the Troubled Asset Relief Program (TARP), the principal U.S. governmental response to the 2008 financial crisis. During his tenure, Treasury recovered more on all the crisis investments than was disbursed. Mr. Massad was with the Treasury from 2009 to 2014 and also served as a counselor to the Treasury Secretary.
Prior to his government service, Mr. Massad was a partner in the law firm of Cravath, Swaine & Moore, LLP. His practice included corporate finance, derivatives and advising boards of directors. He managed the firm’s Hong Kong office from 1999 to 2002 and represented governments and corporations on transactions throughout Asia. Mr. Massad helped draft the original ISDA standard agreements for swaps.
Mr. Massad has a B.A. from Harvard College and a J.D. from Harvard Law School.
Mr. Massad’s recent writings include the following:
It’s Time to Strengthen the Regulation of Crypto-assets, published by The Brookings Institute, March 2019, available at https://www.brookings.edu/wp-content/uploads/2019/03/Economis-Studies-Timothy-Massad-Cryptocurrency-Paper.pdf
“Is Facebook Libra A Betrayal of Satoshi Nakamoto’s Vision?”, Fortune, July 15, 2019, available at https://fortune.com/2019/07/15/facebook-libra-coin-cryptocurrency-hearing/
His faculty sponsor is Professor Jason Furman, Professor of the Practice of Economic Policy at Harvard Kennedy School . Email: timothy_massad@hks.harvard.edu