On 18 June, the world’s biggest social media platform, Facebook, introduced its new cryptocurrency, Libra, set to launch in the first half of 2020. The coin that would have its own blockchain will be backed by several sovereign currencies, and these reserves would be managed by the Libra Association. The association will also be engaged in several other key activities, which would focus solely on the development of the Libra ecosystem.
Notably, the coin has brought together major players in both the financial and technology industry including, MasterCard, Paypal, and Coinbase. Despite such strong backing however, the concept of the coin was soon shot down by several influencers and government authorities.
The French Minister of Finance and Economy, Bruno Le Maire, released a statement asserting that Facebook’s digital currency becoming a sovereign currency was “out of question,” adding that “it can’t and must not happen.” Along with this statement, the Finance Minister also raised concerns about money laundering and terrorism funding and urged G-7 countries Central Bank Governors to draft a report on the new “global currency” for their meeting in July.
Further, Facebook’s cryptocurrency is also facing hurdles in its native country. Maxine Waters, Chair of the House Financial Services, has requested the social media giant to hit the pause button on the development of Libra, until Congress and regulatory authorities hold a discussion on the digital currency. This request was put forth mainly because of the firm’s “troubled past.”
In an interview with WhatBitcoinDid, Caitlin Long, Co-founder of the Wyoming Blockchain Coalition, stated that Libra had its pros and cons, adding that it was a “double-edged sword.” However, the blockchain evangelist continued to assert that this was going to benefit Bitcoin, stating that the social networking platform was “making cryptocurrency a mainstream word.” She added that Facebook would introduce the concept of digitally scarce money to people and that these people would look for the best cryptos that would retain the most value over time. That crypto was going to be Bitcoin, she said.
“This is a detour kind of like Andreas analogy, it’s the intranet before internet. We’ve even seen it in this industry, it’s blockchain not Bitcoin but people are coming full circle back around to Bitcoin. These are detours that are ultimately helpful to gaining adoption and wider support, but they’re not where we end up and I think we will end up in Bitcoin.”
Further, Long was asked whether Libra was going to be its own currency, considering it will not be pegged to a specific currency, but several fiat currencies. To this, she stated that Libra was indeed going to be a currency of its own, similar to Bitcoin. She stated that it was going to function like a “central bank,” remarking that it would be a “private version of a central bank.” Long went on to add,
“They’re going to be managing reserves against the liability. For them it will be the people who own the coins and they will be managing the reserves against that […] they are going to be marketing this in the developing world, this is going to be a developing world concept probably more than a developed world concepts […] so my guess is this is mostly an emerging market phenomenon secondarily a European phenomenon and lastly a U.S. phenomenon.”
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