Libra's darkest hour
Editor's Note: This article comes fromStar Media STARMEDIA (ID: Star_Media1)Editor's Note: This article comes from
Star Media STARMEDIA (ID: Star_Media1)
Star Media STARMEDIA (ID: Star_Media1)
, Author: Yi Boling, published by Odaily with authorization.
On April 10, 2019, Facebook founder Zuckerberg, who changed his usual T-shirt and jeans and wore a dark blue suit, testified in Congress for the first time. In the face of accusations from members of the House of Representatives for his "management negligence and responsibility for harming the privacy of ordinary users", Xiao Zha felt on pins and needles, "I promise that I will correct this mistake and protect people's personal information. What was missing in the incident."
At this time, 143 days have passed since Facebook released the "Libra: Encrypted Electronic Currency White Paper" on June 18.
Libra has been born out of nowhere from the very beginning, and has attracted widespread attention in various fields such as international politics, finance, and society. It has been sought after by many blockchain practitioners. Recently, the six initial members have withdrawn from the group one after another. Now, the color of Libra is getting dimmer, and it is even fading out of our field of vision. It has only been four short months.
The ups and downs in the past four months, just like the continuous decline and rise of Bitcoin, Libra is in a difficult situation.
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Libra from high light to darkest moment
One day in May this year, David Marcus, a Facebook executive and project designer, drank champagne with employees to celebrate the progress and achievements of the cryptocurrency project that had been brewing for a year.
David Marcus is full of confidence, thinking that it will subvert the flow of funds around the world, "We are going to change the world!" David Marcus, immersed in joy and excitement, did not expect, or have no time to consider, what kind of difficulties this project will face after its release .
A month later, Libra was released as scheduled. The founding members include an alliance of 28 companies including Internet companies, bank clearing organizations, payment institutions, telecommunications companies, investment institutions, and non-profit organizations. A simple and borderless world-class currency designed to provide basic financial facilities for billions of people.
One stone caused a thousand waves, and almost at the same time, the price of Bitcoin jumped to an annual peak of $13,968.76.
Since the world's top investment bank JPMorgan Chase issued JPM Coin, this is the world's largest social media open-mindedly embracing the blockchain, and the entire chain and currency circles are boiling again.
Many small businesses are looking forward to it. They envy the founding members and hope to join this social networking company with more than 2.7 billion people for a share. Industry experts and industry leaders believe that the birth of Libra has epoch-making significance. Xiao Feng believes that compared with the first-generation VISA, Mastercard-based payment network systems such as bank cards, and the second-generation Internet represented by WeChat Pay and Alipay, Mobile payment, Libra is the third generation personal payment system. Yuan Dao, chief evangelist of BitTribe Lab (Hong Kong), said that Libra is the first time in a visible and tangible society, from the mainstream to talk about monetary and financial changes and subversive innovations. Chen Bohui, president of the Asian Blockchain Industry Research Institute, believes that Libra is a digital currency that transcends national sovereignty, geography, race, and class. Zhu Jianming, a professor at the School of Information, Central University of Finance and Economics, believes that the emergence of Libra makes countries around the world have to face up to the challenges of blockchain technology and digital currency. In addition to technology, security, and supervision, the biggest challenge is the financial and economic order. challenge.
Sure enough, Libra has made politicians from various countries extremely alert. On September 13, the finance ministers of Germany and France issued a joint statement in Helsinki, the capital of Finland, clearly reiterating the importance of currency sovereignty and opposing the implementation of Libra, an encrypted digital currency planned by the US social media Facebook, in Europe: We believe that currency power belongs to national sovereignty , should not be held by private entities.
India expressly prohibits its citizens from using cryptocurrencies in India. Although Japan has always been open to digital currencies, it is also cautious about Libra.
Masakashi Amamiya, deputy governor of the Bank of Japan, said that if the cryptocurrency Libra is to be popularized, it must solve the problem of technical security and value stability as a means of settlement. As for the issuer Facebook, he said that it is necessary to introduce anti-money laundering countermeasures, stabilize operations and strengthen risk management.
Even U.S. President Trump has said that if Facebook and other companies want to become banks, they must seek a new banking license and be subject to all banking regulations like other banks. There is only one real currency in the United States and its name is the dollar.
On October 30, after a series of private meetings, five EU countries including France, Germany, Italy, Spain and the Netherlands joined forces to prevent the launch of the Libra project in Europe and increased pressure on other members of the Libra Foundation to demand It abandons the project. Eurozone diplomats and European Commission officials confirmed that the alliance is encouraging EU governments to consider banning Libra entirely.
Today, the regulatory attitudes of politicians around the world are gradually becoming clearer, and the pressure on Libra and its association members is increasing day by day. Under high pressure, Libra members have been launched one after another. On October 4, PayPal issued a statement announcing its withdrawal from Libra. On October 11, six institutions, including MasterCard, Visa, eBay, mercadopago, Stripe, and Booking Holding, announced their withdrawal from the Libra Association.
Among them, PayPal is a payment giant in the United States, MasterCard and Visa are international bank card clearing organizations, Mercadopago is a leading payment company in Latin America, Stripe is known as the US version of Alipay, and eBay is a global e-commerce giant.
After the release of the Libra white paper, the Central Bank of China was the first to speak out. Mu Changchun immediately stated at the Yichun Forum that the digital currency of the Central Bank of China is about to emerge. The Swiss National Bank (SNB) and the Bank for International Settlements (BIS) have signed an agreement to collaborate on the BIS' innovation center in Switzerland, one of which will be the integration of central bank digital currencies (CBDCs) into blockchain In the chain technology infrastructure. Germany's finance minister also stated that in the face of challenges from Internet giants such as Facebook, the central bank's digital currency e-euro will be introduced. The Bank of Canada may consider launching a digital currency to help it counter the "immediate threat" of cryptocurrencies, the governor of the Bank of Canada said.
Even the G7 has issued frequent warnings that no stablecoin project should start operating without adequately addressing regulatory challenges, and that central banks should consider issuing their own digital currencies.
As a result, Libra has gone from a bright moment to a difficult and dark moment.
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Controversy: Libra's relationship with Facebook
So, why did Libra encounter the "withdrawal" of many payment institutions? What are the considerations behind the attitudes of central banks?
Long Baitao, one of the authors of the Libra monograph, believed that Libra did not actually subvert the interest pattern of the traditional monetary and financial system. It uses a basket of legal currency assets as a reserve pool. A "pseudo-innovation" on top of the fiat currency system.
In this basket of currencies, the weight of the U.S. dollar accounts for 50%, so it can be said that Libra has been acquiesced by the Federal Reserve since its inception, representing the interests of the U.S. dollar. Therefore, the hearings and inquiries in the U.S. Congress may be understood as legislation. rationalize things.
Since it represents the interests of the United States, the European Union represented by Germany and France, as well as Japan, Switzerland, India and even China are really wary of Libra. Currencies cause erosion.
Among the 7 important partners led by PayPal, especially the withdrawal of 5 of the important payment companies, it seems that it should be found that the Libra Association encountered huge resistance when communicating with global regulators, and the financial business itself needs to face High regulatory standards, worried that regulatory requirements for Libra may affect its traditional payment business. On October 18, JPMorgan Chase and Goldman Sachs rejected Facebook's request to join the Libra Association, citing concerns that Libra will eventually be used for money laundering and criminal activities.
In addition, an important reason why Libra is in such a difficult situation lies in its sponsor Facebook.
Before the release of Libra, Facebook was fined $5 billion by the U.S. government for the scandal of leaking user privacy and collecting and manipulating user behavior by an AI company called Cambridge Analytica in the United Kingdom. ticket.
The research article "The Ties That Bind Facebook's Libra" from Wired magazine on the members of the Libra Association shows that most of the members who are still in the Libra Association have varying degrees of interest in Facebook. The article stated that Libra seems to be using a decentralized organizational structure, but it is actually an elite club, where everyone is bound together and fighting for common rights and interests.
According to media analysis, among the 27 founding members of the Libra Association, 15 have indirect or direct ties to Facebook. Interested institutions and organizations.
Based on the above reasons, Libra is born with controversies such as supervision, centralization and decentralization, and whether it has snatched the right of the national central bank to issue currency, which eventually led to its current predicament.
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The way out: Downplaying the relationship between Libra and Facebook
Cai Kailong, a financial commentator and financial technology expert, believes that ecology, technology and compliance are the three most important characteristics of any successful digital currency.
Bitcoin's blockchain-based distributed ledger technology is admired by the world for its inherent total volume and output speed, as well as its completely decentralized management method. The regulation has also changed from resisting and ignoring Bitcoin at the beginning to being relatively valued and accepted today.
With its grand vision, Libra intends to create a global non-sovereign digital stable currency through an alliance of more than 100 large companies, allowing more than half of the world's population to conveniently pay and settle.
However, the financial industry has always been a highly regulated industry, and the issuance of currency is not simply an economic and social issue, but is often closely related to a country's political power. In the eyes of those on the opposite side, Libra is nothing more than a social media company with a bad reputation and a global monopoly united with some other companies, wanting to issue a global currency without sovereignty and compete with central banks for jobs.
Therefore, if Libra wants to achieve considerable development, it must first draw a clear line with its leader Facebook. U.S. Senator Sherrod Brown once publicly shouted to Libra members: "Facebook is too big and too powerful, and it is unreasonable for financial companies to help it monopolize our economic infrastructure!"
In fact, Facebook did take corresponding steps to make strategic adjustments. On October 15th, Libra's official Twitter announced that the first batch of 21 members officially signed the Libra Association Charter, established the Libra Association Council, elected the board of directors and appointed members of the Libra Association executive team.
