Photo by Sharon McCutcheon on Unsplash

Libra is a Quasi-Fiat Digital Currency

Libra currently looks more like a fiat currency than a cryptocurrency

So the Libra Association could fast track how stablecoins work in a token economy that would bypass a lot of regulation and banking solutions to introduce a whole new kind of financial services convenience.

While Libra’s white paper draws a lot of inspiration from other cryptocurrencies, the current governance model and blockchain implementation remind me of banks more than bitcoin.

This is really important to say, a Libra Globalcoin resembles more the launching of a digital bank with a digital currency than anything related to cryptocurrencies or Bitcoin. To even make the comparison is really dumbed down for mass adoption. Facebook wants to use Bitcoin hype for its own profit.

How Silicon Valley Scammed the World

The Libra Association like the Lightning Network feels more about how Silicon Valley thinks blockchain could be used to monetize better, than anything else. I can imagine a world of Bitcoin, Ethereum and Libra as the last cryptos standing. Tokens be damned, this is centralization — not decentralization.

The reality is then that Facebook’s Libra could be an on-ramp for the death and dead end of crypto. It’s counter-intuitive because sentiment and hype is what Facebook specializes in. Advertising is power in a corrupt internet. The media is not what it used to be.

The Perfect Centralization Appears ‘Decentralized’

In other words, it looks like a blockchain, but it’s not a real blockchain. In the same vein as EOS or Ripple. It’s the same scam as Tron, just smarter in that the Libra coin is tethered to a fiat basket.

It’s not truly decentralized. It’s not truly open, as the ledger of transactions will be accessible to Libra Association founding members exclusively. It’s a vertical chimera of BigTech supplanting both crypto and banking solutions. I cannot actually think of anything more centralized than this, can you?

So you are a stablecoin but manage to convince payment systems it’s in their best interests to join? That sounds like a weird hybrid android and WeChat playbook rolled into one. No wonder Wall Street banks wanted no part in this.

How many crypto analysts did Facebook buy off with this announcement? I’m seeing just a handful of accurate accounts of what this play is about, even in the crypto community, which is supposed to be comprised of people who care about decentralization. It’s upsetting, but not exactly surprising.

Libra can pretend and be packaged to be whatever it wants to gain mainstream adoption. But Facebook is the creator of the Libra Association. Never forget what that actually means. These nodes are but a means to an end.

The Libra cryptocurrency is a stablecoin, as it is tied to a basket of fiat currencies and securities. So it requires a lot of oversight. Yet we live in a world desperately missing oversight in AI, crypto regulations and financial regulations to deal with new blockchain products. Facebook can thus ‘move fast and break things’ all over again, more or less with a clean slate.

The Libra Association will work with a list of authorized resellers. It creates a barrier to entry and transforms the Libra Association into a regulatory body for the Libra ecosystem. How to sidestep regulation? Just create your own regulatory body that doesn’t do what it’s supposed to do and isn’t an independent body.

Libra won’t be as power-hungry as Bitcoin, it will be worse. But couched in a B2B network that’s facilitating new convenience. If cryptocurrency has a reputation of fraudulent ICOs and scams, it’s so interesting that Facebook chose to call its Libra coin a “cryptocurrency”. It’s like an Illuminati joke. Funny enough, the joke might be on the fiat currencies of the countries it will be “setting out to help.”

Small financial institutions will have no choice but to work with an authorized reseller if their clients want to get paid back in Libra, for instance. All the founding members become a sort of Visa or Mastercard for the 21st century.

This is how you begin a dynasty that leads to a global digital currency that has no nation or state, but belongs to the entire world. Facebook will own it, literally.

Bitcoin uses so much energy because people who want to hold the cryptocurrency have to compete for it. Now Silicon Valley is pushing Libra coin down our throats as the next best thing since sliced bread. Well, maybe there’s something nefarious about that. Something undemocratic and the exact opposite of something organic and decentralized.

Libra is designed so that an algorithm issues units of the cryptocurrency in proportion to the size of a company’s initial deposit into the system. Sounds very reciprocal, very centralized and like what you would do if you wanted to build an entire architecture to replace the existing financial order and legacy banking system.

One digital currency architecture to rule the world.

Facebook or other companies will have to set up servers, will have to run the software, will have to validate transactions. Facebook will have all our chat and Libra coin data.

This means advertising at the center of the internet for decades to come.

Libra could become an instant hit and power many of the peer-to-peer and even business-to-customer transactions. It could also launch the biggest unregulated shadow digital bank the world has ever seen. Out with the old and in with the new.

On June 18th, 2019, Facebook released the Libra white paper with the first iteration of the project source code and a technical white paper. Libra’s coalition of partners sound more like a Netflix original than something we’d want to have in place. But San Francisco still thinks it owns us, until China does.

But central banks that issue currencies and conduct monetary policies are members of the International Monetary Funds. They also have different objectives compared to private entities. BigTech don’t play by the rules, they make them up as they go along.

Facebook could destroy Stellar and Ripple and make Litecoin and even Ethereum look like the past. It cannot rival Bitcoin because it isn’t really decentralized at all. Did J.P Morgan and their R&D blockchain teams see Libra in their back-view mirror? Too late.

Given the current nature of the Libra Association, there’s a chance that Libra becomes a quasi-sovereign currency in Venezuela, Argentina, Turkey or South Africa — but it would be controlled by private companies that don’t care about monetary policies.

That’s just a dangerous combination. Dangerous for our money and not just for the global financial system.

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Futurism articles bent on cultivating an awareness of exponential technologies while exploring the 4th industrial revolution.

Michael K. Spencer

Written by

Blockchain Mark Consultant, tech Futurist, prolific writer. LinkedIn: michaelkspencer



Futurism articles bent on cultivating an awareness of exponential technologies while exploring the 4th industrial revolution.