The Threat of Libra
Around one month ago, Facebook unveiled Libra — its first consumer-facing sortie into the crypto and blockchain world, which has been backed by VIsa, Spotify, Mastercard, PayPal, Uber, Booking Holdings, and many other corporations and investors worth billions apiece.
Since then, every businessman, politician, and investor has tried to make their voices heard, trying to either warn of the asset’s implications or laud Libra for its ability to act as a medium of financial inclusion and liberation.
Most recently, Mark Cuban, the billionaire investor and star on the entrepreneurial television show “Shark Tank”, spoke on the Facebook-backed crypto project with CNBC. Flat out, the American businessman said that he isn’t a fan of Libra, adding that he thinks the whole project is a “big mistake”. Cuban, who owns the Dallas Mavericks, went on to back his point, explaining that in nations where there isn’t a lot of “rule of law, government stability, or currency stability”, Libra could become “dangerous” should it see adequate amounts of adoption.
Indeed, should Libra be adopted in a country with governmental problems, for instance, there may be unintended consequences. Whether those consequences are good or bad are debatable though. Cuban expounded:
“There’s going to be some despot in some African country that gets really upset that they can’t control their currency anymore and that’s where the real problems start occurring.”
Skeptical of the Corporate Crypto
Cuban isn’t alone in his skepticism. In fact, as reported by Ethereum World News yesterday, even Donald Trump is against the corporate coin. In a series of tweets, the American leader tried to dismantle the value proposition of not only decentralized cryptocurrencies, like Bitcoin, but Facebook’s Libra too.
Trump quipped that he doesn’t believe that digital assets are money, adding that they are also known to be very volatile and “based on thin air”. Indeed, BTC is volatile due to its status as an early-stage asset, and technically isn’t backed by anything but code and electricity. After touching on crypto asset’s ability to be used in illicit transactions, he lambasted Libra:
“Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.”
Trump’s reasoning for bashing Libra is that it throws a wrench into the United States’ de-facto rule to have no other currencies than the U.S. dollar, which is “by far the most dominant currency anywhere in the World.”
Photo by Tim Bennett on Unsplash