Libra

Facebook has revealed its plans for a new digital cryptocurrency, Libra; before the release, the public already heard about this new cryptocurrency and speculated for months. More details will be released in the coming months. There has been a plenty of articles summarizing the details which have been released so far, so I am not going to do another summary. However, I still want to point out some important facts which interest me.

First, the mainstream payment companies (such as Visa, Mastercard, and Paypal) are backing this new cryptocurrency. This can certainly help to strengthen the popularity of this digital cryptocurrency once it appears in the market. Secondly, it seems the plan does not only attract the online platforms and stores (e.g Uber, Booking Holdings and Spotify), but also attract some telecom companies as well. Moreover, this plan also gets local businesses such as convenience stores involved. Therefore, it is unlike other digital cryptocurrencies which focus the online platform. Thirdly, it is not a much less revolutionary scheme. Although it adapts to the blockchain system, the network will be governed by a Geneva-based independent non-profit association called the Libra Association and the independent association is planned to be run by 100 "diverse" members with equal rights, and there have been 28 initial members including Uber, Lyft, Spotify, Mastercard, Visa, eBay and Paypal. Therefore, it is a relatively centralised system. Moreover, this digital cryptocurrency is not independent of fiat money, it is backed by a reserve of low-risk assets including US Treasuries and bank deposits in various currencies.

These three important facts I think make Libra more doable in the real world and more likely to seek approval from governments. However, I still cannot be optimistic about this plan, since I do not think any government would be willing to support any cryptocurrency and give away one of its important policy tool, money, though Libra is backed by the fiat money system.