Facebook’s Libra: The Next Tax Challenge for the Digital Economy
3 Stanford J. Blockchain Law & Pol'y 228 (2020)
29 Pages Posted: 28 Sep 2020
Date Written: June 27, 2020
In 2019 Facebook announced its plan to launch a cryptocurrency within the coming year, with the express goal of extending past its existing user base to those who lack access to traditional banking services. The prospect of Facebook enabling millions of global transactions outside of the (highly regulated) conventional banking system prompted scrutiny, most immediately in the area of financial services regulation. But it should also heighten the sense of urgency to reconstruct prevailing global tax rules to ensure that highly digitalized businesses pay an appropriate amount of taxes wherever they carry out business activities and create value. This paper lays out Facebook Libra’s original design concept, the problems it sought to solve, and the potential implications its successful launch would have on the redesign of the global tax system that is already in progress. The paper concludes that the current global economic turmoil makes for an uncertain future, but one that will clearly require a coherent strategy for taxing high tech firms and innovations with global scope, with Libra a prominent case.
Keywords: blockchain, tax policy, Libra, Facebook, tax
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