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Libra, at the moment, is the “hot potato” of the cryptocurrency world.
Anyone and everyone is leaping onto the Facebook cryptocurrency bandwagon and voicing their ‘expert’ opinion, with views ranging from “it’s going to destroy commercial and central banks,” to “regulators will ensure it crash-lands before it takes off.”
Weiss Ratings, the cryptocurrency and blockchain rankings firm, threw its hat into the ring, stating that Libra isn’t really a cryptocurrency, with their chief cryptocurrency analyst, Juan Villaverde, “setting the record straight.” The firm tweeted,
Much of what was said about #FB #Libra is simply not true. Our chief #crypto analyst, Juan Villaverde is here to set the record straight. Click here to find out what #Facebook’s Libra really is and how it will change the world of finance:https://t.co/dEkqqdSDjb#cryptocurrency
— Weiss Ratings (@WeissRatings) July 4, 2019
In his piece titled “Facebook Libra: A New, Revolutionary, Fiat Currency,” Villaverde stated that despite adhering to the technological aspect of the cryptocurrency world, Libra should not be categorized as one. Decentralization is thrown out the window, given the corporate giants that are behind Libra, he added. His piece read,
“It is centralized, sponsored, issued and controlled by Facebook and a consortium of powerful tech and fintech companies, including Uber, eBay, Mastercard, Visa, Spotify and Vodafone.”
This consortium will monopolize profits arising from the project and any other utility arising from the cryptocurrency as a medium of exchange will be negligible, or as Villaverde puts it, “Libra holders will get zilch.”
According to the analyst, the “truly revolutionary” aspect of Libra is the company spearheading it and the objective it purports. He stated,
“For the first time in history, we are witnessing the emergence of a currency that’s backed and sponsored not by a sovereign government, but by large multi billion-dollar corporations.”
Calling it the world’s maiden form of “Private money” or “Corporate-sponsored money,” Villaverde stated that this is the very objective of Facebook, and the facade of blockchain is merely a “means to an end.” The purpose and operation of Libra will be made by the committee, in order to prevent ‘one-party control.’
He further added that this “consortium” will act as a “king of Federal Reserve,” and each member company will contribute one representative to dictate Libra’s monetary policy, akin to the Federal Open Market Committee [FOMC].
From the perspective of the cryptocurrency community, Libra will be useful in one area – marketing. With a worldwide brand like Facebook bringing both virtual currencies and blockchain to the fore, the attention on real ‘decentralized currency’ and blockchain use will only soar, and the perception of Bitcoin as a “currency for the Dark Web” will fade.
Villaverde finally compared Libra to be a “fusion of Bitcoin with Alipay,” the China-based online payment platform. The key differentiator between Libra and Alipay is the creation of a native currency that can operate only within the platform. That extra step that Facebook has taken, according to the analyst, is to operate in the ‘gray area’ between government-issued money and decentralized cryptocurrency.
The Weiss Ratings’ Chief Cryptocurrency Analyst concluded,
“This is the first time in history that multi billion-dollar companies have set out to create their own form of money. That alone will change the world of finance. And there’s next to nothing sovereign governments can or will do to stop them.”