Editors Note: This article comes fromCarbon chain value (ID: cc-value), Author: Bai Ye, reproduced by Odaily with authorization.
Editors Note: This article comes from
Carbon chain value (ID: cc-value)
Carbon chain value (ID: cc-value)
, Author: Bai Ye, reproduced by Odaily with authorization.
The purpose of Libra choosing a basket of currencies is very simple, because they hope to make the value of this stable currency more consistent, and the rise or fall of any currency in the basket of currencies will have a relatively limited impact on the value of Libra. Not only that, Libra can also change the basket structure if needed to further protect Libra from price fluctuations.
If Facebooks digital currency Libra does not choose a basket of international currencies to support, but only anchors to the US dollar, what will happen?
Due to a series of crackdowns against Libra by various countries regulations, some of the main founding members of the Libra Association chose to withdraw, including Visa, MasterCard, PayPal, and eBay. Some nervous.
Now, given the growing concern among regulators that Libra may challenge the supremacy of national fiat currencies and potentially harm the global economy, one of the founding members has proposed a major overhaul of Libra. It is the well-known venture capital firm Andreessen Horowitz (a16z) ).
Speaking at TechCrunch Disrupt last week, Andreessen Horowitz encryption venture partner Chris Dixon said he still believes Libra will launch, but that some changes may be needed to get government and regulatory approval. When asked what changes would be needed to ease the pressure on regulators, Chris Dixon replied:
“I can give a hypothetical example, Libra can become a digital currency denominated in US dollars only. My understanding is that it is necessary for regulators to understand that Facebook is by no means creating a new currency, but only focusing on payment channels.”
According to Chris Dixon, this means that Libra will only be pegged to the US dollar, rather than pegging a basket of international currencies as it is now.
According to a previous Reuters report citing Der Spiegel, the English name of Facebook’s digital currency has been determined to be “Libra” and will use the Unicode symbol ≋. Yuan, as well as 11% of the British pound and 7% of the Singapore dollar.
The purpose of Libra choosing a basket of currencies is very simple, because they hope to make the value of this stable currency more consistent, and the rise or fall of any currency in the basket of currencies will have a relatively limited impact on the value of Libra. Not only that, Libra can also change the basket structure if needed to further protect Libra from price fluctuations.
But if Libra is only denominated in U.S. dollars, regulators — especially U.S. regulators — may not worry about people choosing to use Libra over U.S. dollars. Not only that, Libra is only pegged to the U.S. dollar is also an attitude of Facebook, showing respect for the U.S. economic system and responding to government management.
Of course, if it is only linked to the US dollar, it means that Libra is easily affected by fluctuations in the value of the US dollar. However, since many international currencies are also directly linked to the US dollar, Libra can have many precedents in terms of operation. Another benefit of pegging to the U.S. dollar may make Libra easier to be accepted by other governments, because some national regulators do not know much about cryptocurrencies, and they are more concerned that their own currencies will not be directly affected. Libra is pegged to the U.S. dollar It means that there is US dollar endorsement, which can also reduce some concerns of regulators.
On October 14, the Libra Association will hold a meeting to determine final membership, elect a council and develop a charter to regulate its work. However, we have no way of knowing how the meeting will determine which currencies Libra will be linked to.
The reason why regulators in other countries raise concerns about Libra is mainly because Libra may affect the value of their national currencies. For example, if Libra becomes popular and many people around the world are using this cryptocurrency, if the Libra Association suddenly changes the composition of the currency basket, or forcibly removes a countrys legal currency from their basket of currencies, then it will definitely Affects the value of the relevant fiat currency.
French Finance Minister Bruno Le Maire has previously stated: Libra is a manifestation of currency privatization, which will pose a potential threat to national monetary sovereignty... We cannot authorize Libra to grow and develop on European soil.
