According to the Financial Times report, under the premise of regulatory approval, Libra may be the first to launch a stable currency linked to the US dollar in January next year. The specific issuance time also depends on the review of the payment system license application by the Swiss Financial Market Supervisory Authority (FINMA).
At the same time, in order to obtain the approval of the regulator for issuance as soon as possible, while emphasizing the independence of the project,Libra also changed its name to Diem (天时币), which means day, day in Latin. (Note: This article continues to use Libra-related titles) secondary title In June 2019, Facebook released the Libra 1.0 white paper, stating that Libra, as a simple, borderless currency, will provide financial services to billions of people around the world. Its vision is that globally, no matter where people are or what they do, moving money can be as easy, cheap and secure as sending a text or photo. The white paper mentions that the financial infrastructure provided by Libra includes three systems. One is technology, that is, Libra is built on a secure and scalable blockchain. The second is value, that is, the value of Libra is backed by asset reserves, and the exchange of Libra requires corresponding asset mortgages, including sovereign currencies and government bonds. The third is governance, that is, Libra is managed by an independent association. In April 2020, the Libra 2.0 white paper was released. Compared with version 1.0, in this version of the white paper, many contents have changed. Among them, the core change is Libras compromise on the concept of decentralization, and a large degree of concessions and adjustments have been made in terms of regulatory compliance for smooth issuance. In terms of compliance process, Libra will establish a financial compliance and cyber risk management framework, while forming standards for anti-money laundering, anti-terrorism, compliance with sanctions, and prevention of illegal and criminal activities. In addition, the Libra network will also improve market access standards, investigate and file association members, dealers, and traders, monitor network activities, and cooperate with regulatory authorities to act as part of the financial intelligence agency. secondary title The so-called world currency refers to the international reserve currency, that is, a currency that is generally accepted by countries all over the world and plays the role of a general equivalent in international commodity circulation. Being a world currency means not only a measure of value for commodities, but also a means of international payments, purchases, and transfers of assets. In fact, when a sovereign currency wants to become a world currency, in addition to the economic strength of the currency-issuing country must be strong enough to ensure currency stability, the unanimous recognition of the currency by the user country is also a necessary condition. The British pound was the first to become a world currency, followed by the US dollar and the euro. With the rapid development of Chinas economy, the RMB is likely to become a new generation of world currency. In April 2020, a financial report by Facebook showed that its family bucket (Facebook, Instagram, WhatsApp, Messenger) business had 2.36 billion daily active users and 2.99 billion monthly active users. According to statistics, Facebook has the largest number of Indian users in the world, about 300 million, while the US, Brazil and Indonesia have 190 million, 123 million and 120 million users respectively. As of December 2, 2020, the total global population is close to 7.6 billion. Among them, China ranks first with about 1.4 billion, followed by India with about 1.35 billion, while the United States, Indonesia, and Brazil occupy the third to fifth places with 320 million, 260 million, and 210 million respectively. That is to say, in addition to China, among the top five most populous countries in the world, Facebook’s user share is 22.2% in India, 59.3% in the United States, 58.5% in Brazil, and 46.1% in Indonesia, while its global users account for the total population up to nearly 40%. This means that, with its huge global user base and business advantages, Libra has the conditions to set foot in the god domain of world currencies. secondary title However, dreams are wonderful, but reality is cruel after all. image description image description Founder and CEO of Facebook Regarding Libra’s security and other issues, the U.S. regulatory level is mainly concerned. First, for new technologies such as blockchain, relevant regulatory laws and regulations have not yet been formed, and allowing development may disrupt the normal order of the existing financial system. Second, the anonymity of virtual currency, such as free trade on a global scale, is likely to be used by illegal activities, such as money laundering and terrorist financing, causing serious consequences. In the face of strong opposition from regulators, Facebook has also tried its best to stick to it. Libra project leader David Marcus (David Marcus) has repeatedly stated that regardless of the regulatory results, Libra will be officially launched in 2020. secondary title When it comes to the subversiveness of Libra, this kind of virtual currency that is born to cross the high walls of sovereignty is easily reminiscent of its concept of a decentralized world financial system based on a large global user group, and through a variety of sovereign currencies. A novel form that supports value realization. Today, Libra is impressive and talked about, actively embracing supervision, resolutely brandishing a knife, and embarking on the road to compliance without hesitation. It has to be said that this is not only a rational choice after going through ups and downs as a non-governmental organization, but to some extent, it is more like a supplement and consolidation of the dollar hegemony. Obviously, Libra cannot meddle in the existing sovereign financial system in the form of going it alone. The result of the confrontation between the two is nothing but elimination or transformation. From the perspective of Libra, which has transformed into Diem, it is not difficult to find that under the current global wave of currency digitization, Libra is likely to be included as an elite force under the digital dollar system, and will show its talents in the competition of the global digital financial ecology in the future. . 01. Digital dollar In May 2020, the Digital Dollar Project (Digital Dollar Project) white paper was released, and pointed out that the plan is a cooperation between the non-profit organization Digital Dollar Foundation (Digital Dollar Foundation) and Accenture to provide consumers and institutions in their domestic and global economies. Dollars for the future. At the same time, as a key and prudent initiative of the Federal Reserve, the digital dollar will also be piloted in a series of application scenarios. It is worth noting that although the digital dollar project was initiated by the orthodox, its main participants are actually civilian identities. In addition, the white paper shows that the most important function of the digital dollar is to support the US dollar as the world reserve currency. That is to say, after Libra has been orthodox recognized and authorized, it is very likely to be a derivative version or even the first version of the digital dollar, with the purpose of consolidating the US dollars status as a world currency. Interestingly, the digital dollar white paper was released exactly one month after the release of the Libra compliant white paper. Yao Qian, director of the Science and Technology Supervision Bureau of the China Securities Regulatory Commission, believes that it will be very simple if the digital dollar is selected to be issued on Libra. At the same time, Libra has changed from a borderless currency to providing services for various countries to issue central bank digital currencies, which shows that it can also be combined with the digital dollar. In addition, if it cooperates with Libra, the Federal Reserve does not have to consider the cost of system construction, nor does it have to worry about service pressure. 02. Solution On the surface, Libra belongs to the trend of embracing regulation. But in fact, Libras new measures seem to be based on the background of the de-cashization of the global settlement system and the general trend of de-dollarization in settlement, foreign exchange, and reserve assets in many countries around the world. Recently, the well-known economist Jim Rickards (Jim Rickards) said that because of the various hegemonic behaviors of the US dollar, including many problems brought to oil-producing countries such as Iran and Venezuela, the global central bank will further weaken the role of the US dollar and the share of reserves . The recent U.S. dollar index fell 2.6% again, hitting a new low in two and a half years. Facing the declining trend of the status of the US dollar, especially under the catalysis of the worldwide public health crisis, the value of the US dollar is facing an unprecedented impact. With Iran listing the renminbi as the main foreign exchange currency, other sovereign currencies have begun to usher in more opportunities. At the same time, the digital renminbi is about to be officially launched, and many countries around the world have begun to develop central bank digital currencies. method of transformation. At a recent meeting, the German Finance Minister stated: I hope the European Central Bank will accelerate the launch of the digital euro, and digital payments may become an effective solution to protect the euro from bypassing the dollar. The launch of its own central banks digital currency may be more anxious than anyone else, and Libra has undoubtedly become the fastest and best solution for the United States to solve its urgent needs. The digital dollar supported by the Federal Reserve is unlikely to be realized in the future, but the United States must lead the global financial innovation of digital currency. No wonder Federal Reserve Chairman Powell said so. 03. Intersection · Fusion To achieve convenient and low-cost cross-border payment on a global scale, so as to occupy a place in the new world currency pattern, is undoubtedly the original intention of various countries to develop central bank digital currency. At a time when the U.S. dollar is struggling, in order to ensure its dominant position in the global currency, the United States is bound to adopt the most efficient and economical method to occupy the high ground. When the urgent need of a sovereign digital payment system meets the ready-made ultra-large-scale financial infrastructure, under the catalysis of the same interests, the chemical reaction related to defending the hegemony of the US dollar is beyond imagination. However, all of this is based on the premise that Libra satisfies compliance, security, and centralized control. According to the white paper, digital dollars will be distributed in accordance with the two-tier structure of primary distribution, secondary distribution, and P2P transactions, that is, from the Fed to commercial bank distribution to multiple payment models between individuals and enterprises. If Libra is finally approved for issuance by the regulatory authorities, regardless of whether it is issued according to the above ideas, it will at least be a commercial version digital dollar produced along the compliance route. It is conceivable that Libra should be able to make breakthroughs in promoting innovative economic models without undermining the stability of the existing financial order, and maintain maximum compatibility with existing relevant economies and laws. epilogue Since its birth, Libra has attracted worldwide attention. The huge user base, coupled with the application of decentralized innovative technology, has stirred up an unimaginable value influence. However, as the Japanese TV series Liar Game deduces, human nature craves blessings but also clings to greed. Therefore, there are various rules to balance the two ends of human nature and release the value of trust. If you dont follow the rules, you cant make a circle. New things are bound to usher in constraints and norms after they have experienced brutal growth. In this era of technological innovation, various competitions and crises are unfolding. Creation and destruction interact to push the wheel of human civilization forward. In the future global digital financial ecology, there must be many complications, but compliance and security are indispensable.What is Libra?
world currency dream
Broken Wings Compromise
The Road to Compliance: Deep and Far
epilogue
