In the USA, for example, the parliamentary committee for financial services has called on Facebook to temporarily stop Libra; more than 30 US lobby associations had previously formulated a similar demand. In other countries such as France, Germany, Russia and Singapore, Libra has so far also met with little approval.
The presentation of the whitepaper of Facebook’s crypto project Libra for a global digital crypto currency has caused a lot of unrest not only in the crypto scene. While the Binance crypto exchange, for example, has a positive attitude towards the planned crypto currency and is even planning to become a node for participation, criticism and warnings are hailing towards Facebook, especially from politicians and supervisory authorities.
To shed some light on the situation, Cointelegraph asked eight renowned crypto experts from German-speaking countries about their views on Facebook Libra. Robert Schwertner (CryptoRobby) explains why Facebook is looking for a “new story” with the Libra project and why the planned Stablecoin is a step backwards compared to Bitcoin and Co.
Libra is not innovative at all
One thing is for sure: Libra is not an ingenious invention of Mark Zuckerberg and his Facebook group, but a logical development of blockchain technology and also of crypto currencies like Bitcoin.
This text is a translated version of Cointelegraph original
In principle, every crypto money is a specialized e-mail or messenger service. Whether you send information as text or as a money message makes hardly any difference. As the world’s largest messenger service group, it is therefore obvious for Facebook to offer a crypto currency and thus support its core business as a social media platform, advertising group and news agency. In general, Facebook seems to have reached its zenith, the younger generation hardly uses Facebook, and user numbers are declining. Facebook urgently needed a new “story”.
However, Libra is not innovative at all. On the contrary, if you read through the technical descriptions, it quickly becomes clear: the centrally controlled Libra Coin is a step backwards compared to Bitcoin, Ethereum and other truly decentralised crypto currencies.
Libra has many enemies
And even before Libra is even in circulation, it is already making many enemies. As a so-called stable coin, Libra is tied to a basket of currencies. Thus price increases and price rises are excluded from the outset. Sounds good, but in practice it can mean that some currencies, especially in emerging and developing countries, can come under pressure because an alternative currency is available that reacts less flexibly.
In Europe, we have learned that the euro can have a negative impact on weaker economies because a state can no longer control its monetary policy, which has led to social unrest like in Greece, for example.
It must therefore be said that the match is not between Libra and Bitcoin, but between central banks, financial supervisors and other financial institutions in the world and the new Libra coin.
Libra has many enemies: central banks feel uncomfortable because a corporation suddenly prints its own money, which means crossing borders radically and losing power and control. This could deprive the state of its monopoly on money printing and monetary policy. Banks are also very critical of Libra because suddenly remittances are made past them.
The fact that Facebook continues to collect enormous amounts of data with Libra alarming. Providing Facebook with our financial date makes us even more transparent. Surveillance Capitalism is being taken to extremes here. Although the Group asserts that the transaction data will not be combined with other social media data, Mark Zuckerberg is under heavy fire in the USA and Europe for the misuse of data.
Currently the heated discussions about Libra are helping the other crypto currencies. In the short term, Bitcoin’s share price has risen sharply, and the lagging Altcoins may also correct upwards in the near future.
Another exciting question is: If a private company can suddenly print money, what happens if the company goes bankrupt? To what extent is the currency secured? Since the financial crisis of 2008, we have known that there is a “too big to fail”. Libra’s concept, however, envisages its use by the broad masses, which inevitably makes the crypto currency systemically relevant. But if the service is suddenly discontinued due to the bankruptcy of the companies involved, many people can lose everything they own.
So you have to put Libra in a strong position and that is only possible if regulators find clear rules for the new crypto money.
In India, where Facebook has more users than in the USA, a law is currently being passed prohibiting the use of crypto currencies and punishing them with up to 10 years in prison. This should be a first answer to Libra, further states will follow.
A report that Mark Zuckerberg had already met with the head of the British Central Bank made people sit up and take notice. Although the content of the meeting is not officially known, Libra was quite certainly on the agenda.
It is pleasing that crypto currencies are moved by the discussion around Libra again more into the limelight and humans argue with it increased.
One thing is also clear: there will be digital currencies in the future. It remains to be seen whether they will be put into circulation by states or by private corporations or – as in the case of Bitcoin – by a computer program that cannot be controlled centrally.
More on Libra: How Facebook lies about Libra