Facebook's planned virtual unit Libra, already under heavy attack from
US President Donald Trump and global regulators, faces scepticism among
the wider cryptocurrency community as well. PHOTO | DPA PICTURE-ALLIANCE
| AFP
LONDON,
Facebook's planned
virtual unit Libra, already under heavy attack from US President Donald
Trump and global regulators, faces scepticism among the wider
cryptocurrency community as well.
One theme – besides
Brexit – dominated discussion among the movers and shakers from London's
financial technology or FinTech industry as they gathered for their
annual get-together: the future of virtual currencies.
"Can
I just ask you to raise your hand if you would not be willing to use
Libra?" asked the moderator at an event at London's recent 'FinTech
Week'.
DOUBTS
In the
room, filled with about 100 experts and media who closely track the
sector, about two-thirds of participants raised their hands to express
distrust at the upstart currency.
Helen Disney, founder and boss of Unblocked Events, which
promotes the block chain technology that powers many cryptocurrencies,
acknowledged growing doubts over who exactly would oversee and regulate
Libra's operation.
GOVERNANCE
People are "concerned about how the governance... would work", Disney told AFP.
"The
cryptocurrency community is very libertarian in thinking. It’s about
giving power to the people, democratisation of finance, keeping away
from big banks and companies who control (the) economy," she said.
Last week's gathering came one month after Facebook announced to the world its plans for the virtual currency.
Libra,
which is widely regarded as a challenger to dominant global player
Bitcoin, is expected to launch in the first half of 2020.
100 PARTNERS
Whereas
Bitcoin is decentralised, Libra will be co-managed by 100 partner
firms, including Facebook's newly-minted financial services division
Calibra.
The companies behind Libra – which will be
backed with a basket of real-world currencies – include payment giants
Visa, MasterCard and PayPal, as well as taxi-hailing services Lyft and
Uber.
To access Libra on smartphones, users will go through a virtual wallet that will also be named Calibra.
While
Facebook boasts an enormous customer base dotted across the globe that
should facilitate Libra's uptake, it firm also been plagued by privacy
concerns that could make users hesitate.
"Can't wait
for a cryptocurrency with the ethics of Uber, the censorship resistance
of Paypal, and the centralisation of Visa, all tied together under the
proven privacy of Facebook," said Sarah Jamie Lewis, head of non-profit
research organisation Open Privacy.
REGULATORS
Libra
has meanwhile raised eyebrows among the world's financial regulators,
including the Bank of England, the European Central Bank and the US
Federal Reserve.
But Disney believes that Libra will
finally force regulators to present clear regulation guidelines, as
demanded by the cryptocurrency community itself.
"We
have been waiting for a long time for a clearer signal (regarding) the
regulation of cryptocurrencies and digital assets," she said.
But
James Bennett, head of cryptocurrency research firm Bitassist, argues
that Libra should not be seen in the same light as Bitcoin.
NOT A CRYPTOCURRENCY
"In the long run, people may realise that Libra is not a cryptocurrency," Bennett said at the FinTech Week event.
"A
true cryptocurrency should be resistant to attacks by all parties, from
sovereign states to global corporations," he said, adding that
"cryptocurrency is a type of money used to transfer value over the
internet that cannot be stopped, confiscated or destroyed by any single
entity".
Trump has meanwhile unleashed a vicious attack
on virtual currencies, slamming them for their alleged shadowy nature
and arguing that Libra had no standing nor dependability – unlike the
dollar.
"I am not a fan of Bitcoin and other
cryptocurrencies, which are not money, and whose value is highly
volatile and based on thin air," Trump tweeted Thursday.
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