- Cryptocurrency traders and financial commentators are divided by news that Facebook plans to launch its own digital currency, believing it could help or hinder the adoption of ‘true’ cryptocurrencies.
- One group argue that it will properly introduce the mainstream to cryptocurrency, by providing many of Facebook’s 2.7 billion users with a regulated, stable digital currency.
- Others believe it will set the movement back, as people choose it over more volatile and truly decentralised coins.
Nowhere more so, it appears, than among those who already believe cryptocurrencies are the future.
Principally because Libra isn’t like other coins.
Cryptocurrencies are digital currencies, built and maintained independently by a community, that are entirely separate from fiat currency (traditional money).
Facebook’s proposition, on the other hand, is quite different, given Facebook will exert some control over it and its value will be tied to traditional assets.
Facebook made this very clear in its white paper, explaining that Libra will be backed by a basket of foreign currencies and government bonds for example.
This caused quite a reaction amongst traders of cryptocurrency, where the community mainly falls into two very different camps.
Some like venture capitalist Gary Tan, who was an early investor in cryptocurrency trading platform Coinbase, heralded it as a great step forward for the cryptocurrency movement.
Most estimates place today’s crypto users worldwide at under 35M people total.
There are 2.4B Facebook and 1.5B WhatsApp users
In 2020, these billions of people will have a fiat to Libra on-ramp… and from there, to every other crypto pair.
This is clearly a big day.
— Garry() (@garrytan) June 18, 2019
That view was shared by the founder of cryptocurrency developer Digital Currency Group Barry Silbert who compared Libra to Netscape, the now-defunct precursor to modern internet browsers.
The launch of Facebook’s cryptocurrency will go down in history as THE catalyst that propelled digital assets (including bitcoin) to mass global consumer adoption. Will be remembered as just as important — and transformative — as the launch of the Netscape browser
— Barry Silbert (@barrysilbert) June 14, 2019
Cryptocurrency information database Messari’s CEO Ryan Selkis told Bloomberg News that Facebook would lend its size and lobbying efforts to the digital currency cause.
“This project, in particular, is going to have so much regulatory scrutiny that it does open up so many opportunities for other smaller and developing digital assets, including Bitcoin,” CEO Ryan Selkis said.
Others, like CEO of cryptocurrency exchange ShapeShift Erik Voorhees, however, remained far more sceptical.
13/ Next: Libra achieves stability (a critical feature for most normies) by backing the coin with a basket of a) government fiat, and b) government debt (bonds). Personally, I want nothing to do with either of these “assets.”
— Erik Voorhees (@ErikVoorhees) June 18, 2019
While believers in cryptocurrencies, like financial commentator Peter Schiff, prophesied that Libra would have a negative impact on the space.
Facebook’s new crypto currency “Libra” is bad news for Bitcoin. Facebook will target the very market Bitcoin is counting on for growth, the unbanked in nations with high inflation. Libra will be stable, and much easier and cheaper to use as a medium of exchange than Bitcoin.
— Peter Schiff (@PeterSchiff) June 14, 2019
The thing they do all agree on is that digital currencies, in one form or another, are here to stay.