Media worldwide is flooded with reports and analysis about Facebook's Libra, lately. We have been trying to learn more about Libra from different perspectives and the following three stories serve the purpose well - Laura Shin's interview with Libra Association's Dante Disparte, Union Square Ventures' note about why it joins Libra as a founding member and Signature Bank's Co-founder and Chairman's post in Coindesk voising his concern with Libra.
1. Laura Shin's Podcast interview with Dante Disparte, Head of Policy and Communication at Libra Association
It is always helpful to hear directly from Facebook and Libra Association. In the interview, Dante Disparte explained that Libra Association has three responsibilities: a) Provide overall governance b) Provide a reserve and treasury feature for the digital currency c) Manage technology road maps for the open source project.
When being pressed by Laura with regard to how to protect consumers' financial data, in particular in the case that Facebook just launched Calibra, a wallet for to-be-launched Libra digital currency and will be integrated into Facebook's own apps including Messenger, WhatsApp, and Instagram, Disparte, obviously annoyed by this question, raised his voice and came up with lengthy answers, most of which missed the point.
Laura asked whether Libra would change its design if government (s) challenged what it was trying to do, Disparte dodged the question. Instead, he contributed the social problems of billions of people's lack of access to banking system or under-banked to current banking systems, such as check and balances, KYC, AML check, non-interoperability, etc. He pointed out that such social problems could be addressed by the uncommon coalition like LIbra Association, which will also helps redefine what banking means.
Laura asked how Libra would be able to tap into the large population which seem not to be able to benefit from its future offering, e.g., Facebook is not used in China; India has decided to ban cryptocurrency, Disparte reiterated that Libra is only an infrastructure which will not interact directly with customers, instead, it will rely on its partners, developers and other founding members in the coalition which are plugged jurisdictionally in the target market. Second, more than 1 billion people have access to mobile banking, a reality, nothing imaginary.
Laura asked whether there may be the circumstance that some citizens in developing economies would choose to hold Libra token rather than their own countries' fiat currencies.
Disparte said that utility of Libra token has no intention to create system risk or disrupt economic order because it is not a speculative asset, to be issued based on supply and demand and that the goal is to create a digital twin of a type of financial stability central banking independence. In order for the planet to have more stability and certainty and create more opportunity for people, a financial instrument that is digital native which enables stability and certainty need to exist.
Laura asked about the identify system in the white paper. Disparte explained that the identity system mentioned in the white paper was not tied to Facebook profile. Payment system and social media profile would be fire-walled. He brought it up that the potential of Libra being utilized broadly would help chip away identify challenge, that is, more than 1 billion people without nationally issued ID, a challenge a coalition like Libra can help address.
Disparte emphasized that Libra will abide by laws, comply with regulations and will not interact with any jurisdictional issues. He also emphasized that Libra did not intend to disrupt traditional finance but to expand opportunities collectively and empower billions of people.
2. Union Square Ventures posted in its blog elaborating why it decided to join Libra Association as one of the first 28 founding members.
Libra is a stable, fiat-backed cryptocurrency that will launch inside some of the world’s largest consumer-facing applications. We believe Libra has the potential to be the catalyst that brings the entire cryptocurrency and cryptoasset market into the mainstream.
3. Scott A. Shay, co-founder and chairman of Signature Bank of New York, candidly voiced his concerns about Libra via Coindesk.
Allowing Facebook to mint its own coin, the Libra, would turn it into the greatest anti-competitive trust case in history. It would make the early 20th century Morgans or Rockefellers seem downright competitive.
Even before it unveiled its vision for a global cryptocurrency this month, Facebook was already a near-monopoly in social media, and part of a duopoly in its main markets. Together with Google, it controls 82% of the digital advertising market.