Libra will be more destructive than bitcoin

When Mark Zuckerberg first shyly mentioned in his New Year’s address in 2018 that Facebook would deal with decentralized technologies, such as encryption and cryptocurrencies, few thought that the founder of Facebook had just announced one of his biggest moves in history, and somewhat more mainstream media interest. he only got it when it became clear that FB’s contacts with central bankers were starting because Zuckerberg wanted to launch a new cryptocurrency, Libra.

But only if you read the so-called. white paper compiled by representatives of the Libra Association (supposedly a non-profit multilateral organization that develops organizational and technological solutions for the launch of Libra) you can understand what weight the new project of Mark Zuckerberg will have.

Everything is clear when you read there that companies such as MasterCard, PayPal, Stripe, Visa, eBay, Lyft, Vodafone and a number of venture capital companies will work on the development of Libra, as well as companies that have already become famous for the development of blockchain technology (Anchorage , Bison Trails, Coinbase…). A small number of companies and organizations from the list are mentioned.

There are two key differences between Libra and other hitherto known cryptocurrencies characterized by very high volatility when it comes to value. Namely, most bitcoin-like cryptocurrencies had no background value but relied, as Libra will, on secure, scalable and reliable blockchain technology. Libra, by contrast, should be backed by bank deposits and short-term government bonds that should provide it with intrinsic value.

In addition, the world of cryptocurrencies did not care too much for regulation until the huge growth in the volume of trade in certain cryptocurrencies, and Facebook initially began to pay attention to serious regulatory issues and founded Caliber, a subsidiary through which to ensure strict regulation. social data and financial data of users in future network operations that will be based on Libra services.

But given that Libra, like other cryptocurrencies, clearly aspires to compete with currencies backed by sovereign states or associations of states, it is clear that Facebook will have a lot to do with multiple regulators – from central banks to anti-money laundering institutions. .

In particular, it remains to be seen whether Face’s Libra may become a currency that many buy primarily for speculative reasons, ie. because they are counting on an enormous jump in value, as happened with bitcoin or it will really become a new global currency – an international means of fast and secure payment that has a reserve in government currencies and securities. Facebook already had experience with cryptocurrency, but it was not successful because users simply did not recognize it. The market will, of course, be a key challenge for Libra as well.

Facebook approached Libri much more seriously than its first cryptocurrency. The man leading the development of Facebook’s cryptocurrency is Kevin Vale. He was transferred to a new job from Instagram. He claims that he works on numerous details every day for 20 hours with his teams.