Libra Not to Challenge National Currencies
In a continuing series of talks and reassurances, Bertrand Perez, managing director of the Libra Association, stated that Libra will not compete with existing money.
Libra is not here to replace existing money, announced Bertrand Perez, managing director of the Libra Association. This echoes the sentiments of David Marcus, head of the Calibra project, who stated that as a payment system, Facebook’s stablecoin will not attempt to take over national currencies.
“We are not in the area of implementing any monetary policy with the (Libra) Reserve,” Perez said during a blockchain conference in Geneva.
There is still hope that the Switzerland-based Association will launch Libra in early 2020. But national regulators have moved in with suggestions that the currency could undermine payments in national fiat, while leading to unwanted dollarization in smaller economies.
However, data show that Europeans still prefer cash payments, with a steady growth of payment through debit cards. Libra also has the potential to work as a fintech mechanism, but this would still be dependent on regular banking.
One of the aims of Libra is to be used beyond developed countries, as a form of banking system for the unbanked. At this point, it is unknown if such influence would be allowed. Experience shows that until now, crypto assets have failed to serve distant, underdeveloped populations, and are actually most actively used in developed countries.
Even as a testnet, Libra is starting to take over the crypto community. The 2Key wallet recently announced it has built a Libra integration feature.
The Libra project is actively recruiting developers to implement the new protocol, even when the launch faces regulatory uncertainty. Libra has plans to be integrated with WhatsApp and other side features of Facebook.
After mid-2020, Libra will also face the restrictions of the Financial Action Task Force (FATF), limiting anonymous payments to the equivalent of $1,000. At this point, it is uncertain what the value of Libra users would be, as global standards are vastly divergent.