Libra Won’t Be Changing the world, for now…
In the June of 2019 crypto enthusiasts around the world got extremely excited for the prospect of Facebook’s own digital currency – Libra. Social media giant was set out to disrupt the principles of global finance and economy by introducing a revolutionary cryptocurrency, which was going to put power back into the hands of the people. A mere several months later the U.S. Government took notice of Mark Zuckerberg’s plans. Realizing potential hazards, politicians started to pressure Facebook into a significant reverse. The latest updates from the representatives of Facebook have shown that the previous plan is going to be significantly deviated, turning Libra into a more sophisticated form of an e-payment platform.
In its former plan, Libra was going to provide a free and global economy that was going to be independent from any governmental oversight. In the initial design, Libra Coin was planned to cooperate with the FIAT Currencies, providing a proper valuation in the world of global finance. The reason behind this was to minimize the volatility of the coin and ensure the relative stability that most of the FIAT currencies enjoy. Basically, the plan was to provide the whole world, and especially 3rd world countries, with the ability to access banking and payment systems through Facebook – An alternative global financial system.
U.S Government reaction and consequences
Once the whitepaper for the initial project was released, the U.S. Congress started to push towards blocking or the alteration of the project. The reasons behind this were Facebook’s unlikable reputation, concerns for the privacy violations, inability to track financial operations and a realistic threat to the U.S Dollar’s strength. After the scrutiny from the government, major companies that previously partnered up with the Libra Association – pulled out of the project. These prominent companies were; Mastercard, Visa, PayPal, Vodafone, etc.
Plans for Libra at this moment
The first major difference in the upcoming release is the fact that Libra seems to be ditching the idea of a single Coin. Facebook will be launching different digital coins, each backed by the established FIAT currencies of various governments. USD, EUR and other major currencies will have their cryptocurrency equivalents. They will be used for the global transactions, especially in the countries that don’t have digital currencies. In the future Libra Coin will become somewhat of a composite of all those available coins.
Another significant difference will be the movement towards a single authority control, when it comes to running the network of Libra. Initially it was designed to put power into the hands of users, with a type of system that won’t be requiring any authoritative permissions. Basically, same as Bitcoin and other cryptocurrencies. This alteration brings us to the final major difference, which is the control of wallets. Unlike the initial plan, now Libra association will be keeping a close eye on the wallets within the system, overseeing all the financial proceedings.
What to expect in the future?
Although current plans for the Libra are significantly deviated from the initial course, there might still be hope. These actions were the result of a heavy scrutiny from the governments all around the world. If this “updated” version will receive the government’s green light, it could be the first step for the financial revolution that Facebook was set out to achieve. So far, it seems like FB has created another PayPal, but the future might show a completely different picture.
Contributed by George Khmelevski