Binance will be launching a currency to compete with Facebook’s Libra called Venus.
To be clear, competition is ALWAYS good; in currency, especially so. This is about how these unique coins are going to change your world, one way or the other.
The Facebook crypto Libra is a project based out of Switzerland. So for all of you who believed the Congressional dog-and-pony show mattered at all, it didn’t. 30 governments began huffing into paper bags when Libra was announced. The reason for this is simple; without currency manipulation, those 30 government organizations will not exist. When announced, Libra was a basket of 4 currencies; that has now logically expanded to 30, to promote smooth transitions at least.
The US Dollar, Libra, and Bitcoin all represent currency technology. There are 2 types of technology represented, fiat and blockchain. Fiat mean ‘by decree’(“in the name of the law”) and the value of the currency is that it’s assumed to be legal tender in that legal system. The legal system enforces the tender law and the contracts rendered in said tender. The blockchain is a specialized legal system into itself and only deals with currency. It’s a take-it-or-leave-it voluntary currency structure and has no weight in law, just code that is irreversible by courts*. As you can imagine, the people relying on ‘business’ in those courts then try to outlaw, or suggest it’s possible, to outlaw the non-fiat, as is happening in India right now. It doesn’t work. it’s not possible to police an economy and never was. The regulatory structures on this planet function through ignorance, then mass compliance, and lack of options. Two of those three are dying. What happens when the compliance goes?
Libra represents a plug in the bathtub of fiat that is the US dollar and all the fiat denominated in it. As countries leave the dollar hegemony, an inflationary event could destabilize the dollar. Libra will offer the Fed, BoJ, and ECB to take turns eating currency shocks while sharing the load and providing an inflationary-airbag mechanism that the planet cannot rely on Bitcoin to provide. The volume of USD vs the crypto world is so massive that the entire crypto market needs to play just-the-tip with the fiat for another year just to adjust to that much currency moving into the ~top 250 blockchains with sound track records, intelligent use cases, and sustainable business models. Some call them “shitcoins”; some call it Web 3.0. Libra has the infrastructure in place to provide a backstop to a run on the dollar and based on the financial savvy and wisdom on the average human, it’ll work.
Venus is a clone of Libra, except we do not know the currencies that will be in it’s basket. They are advertising it as a “regional competitor” against “financial hegemony”. What it does do is solidify a 3rd type of currency option to humanity; we have government private, and corporate currency. Because there is a competitor to Libra, the aforementioned “plug” that can act as a de facto dollar escape is not the only escape. Now, it may be REALLY hard to get a lot of dollars into Venus. When I hear ‘regional’, I hear the fiat of China, Russia, and India, at least. However, Gresham’s Law is a bitch, campers. We’ll have to wait and see whose fiat ends up where…
Since time in memorial, the currencies you and I have used have been government issue, with some exceptions. However, the current crop of humans has lived their whole lives in a bias: the value of the dollar has never been stable. It’s know to have inflation at supposedly managed and stable rates; the planet is figuring out that scam. The kilogram has gotten it’s proper scrutiny. The dollar will how get a hot wash and it should become clear that a “stable coin” is anything but.
You now have the options. Government money, private money, and corporate money. The things you support will be in the currencies you use. The wars that the dollar supports may find themselves without a budget. Libra will be a tool of the fiat-monopoly and Venus is there to allow you to choose a non-dollar option. This is the changing world we live in, like it or not.
I will buy neither. I will stick to the private currencies of Web 3.0. I’m glad for the options though.
If you would like to explore decentralized legislatures and the removal of politicians from civil society, click here.
Donnie Gebert is a former military intelligence analyst who served in the US Army and Navy.