Libra Is Still Having Some Trouble
Libra is Facebook’s new stable cryptocurrency. Designed to be a global payment system, the currency can be utilized via social media to purchase goods and services. Unfortunately, at the center of the project is a serious trust issue - one that seems to be growing larger with each passing day.
This is the sentiment of Ripple’s Brad Garlinghouse and Ethereum’s Joseph Lubin, who both say Facebook hasn’t done enough to garner trust back from its users. Garlinghouse recently claimed that Libra was suffering from a “deficit of trust,” and while he doesn’t personally have anything against the cryptocurrency, he believes it will be a very long road before anyone feels comfortable enough to use it.
What Libra and Facebook got wrong is the foundation of any financial service. Mark Zuckerberg admitted he has a deficit of trust, particularly with governments.
That much is clear. Recently, Zuckerberg testified at a congressional hearing to discuss the company’s plans regarding finance. This succeeded a separate hearing during the summer in which David Marcus - the head of Facebook’s blockchain division and the main developer behind Libra - also testified before a congressional committee.
Zuckerberg is now saying that Libra will not go forward unless U.S. regulators fully approve. Granted this doesn’t occur, Facebook may feel compelled to leave the Libra Association.
Garlinghouse also took issue with certain things Zuckerberg has mentioned in the past. During his recent hearing, Zuckerberg explained that Libra was a way for America to retain its financial leadership. Garlinghouse, however, was quick to point out that Libra is based in Switzerland. Thus, he questions how much the U.S. could truly grow thanks to Libra’s presence in the financial space.
Lubin also took aim at Libra, calling it a “weapon of mass societal manipulation.”
Being a Stable Currency Could Make a Difference
Both men do feel, however, that Libra has an advantage in that it’s allegedly a stable currency. Recently, Congress discussed the prowess of stable coins, and several members have referred to them as revolutionary tools in the future of money. They’re confident that stable coins like USD Coin (USDC) and the Gemini Dollar have the power to alleviate some of the volatility and price swings often witnessed in the world of mainstream cryptocurrencies such as bitcoin (BTC) and Litecoin (LTC).
Either way, even though Zuckerberg’s testimony has concluded, Libra’s journey seems far from over. The currency is set for a 2020 debut, but with the Libra Association growing smaller every day (several organizations have already left) one wonders if the currency will have the support it needs to remain successful.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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