Libra: conflicting opinions about the Facebook project
Crypto

Libra: conflicting opinions about the Facebook project

By Marco Cavicchioli - 20 Oct 2019

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Since it was announced, Facebook’s Libra project has generated numerous conflicting opinions. 

Among those coming from the political world, many turned out to be against it, whereas among those coming from the financial sector, some were in favour of it. Within the same crypto world, many have expressed themselves in favour, many against, and some have not yet made a clear statement. 

In general, it can be said that there is a kind of balance between the number of people in favour, the number of people against, and the number of those who have not yet chosen which side to take. 

In fact, even within the political sphere, which to date appears to be the least favourable towards the project, conflicting opinions have emerged. While on the one hand the French minister Le Maire has explicitly asked for a ban, some American senators instead expressed themselves as open-minded, suggesting to give Facebook a chance. 

Among the central banks, there are those, like the BIS, who have expressed strong doubts, going so far as to suggest that Libra could actually put global financial stability in crisis, whereas the Bank of Italy, for example, has de facto opened up to this project.

Even within the economic world, there is no consensus on the opinion to be given about this project. There are those who believe that Libra is a Ponzi scheme and those who believe that it could be a good thing

But, in addition to the reaction of political, economic and financial institutions, it would also be important to analyse the reaction of potential users. 

In this case, however, it is much more difficult to get a precise and global idea of the prevailing opinion, because obviously, the views are hundreds of millions, if not billions, and often different from each other. 

There are also those who have asked for an absolute ban on proceeding, in a petition that until now has collected just over 80,000 virtual signatures, but what is missing is a precise assessment, perhaps among Facebook users, so it would be at least possible to estimate how many people would actually agree to use this stablecoin. 

The only data available to date seems to be that 34% of people who responded that they would be willing to entrust Facebook with the custody of Libra tokens. If this survey were correct, given that the users of the social network alone are more than a billion, it would mean that more than 300 million people would be hypothetically willing to use the stablecoin, which is more than enough to determine its eventual success. 

The main concerns of those who have expressed a contrary opinion are: the risk of privacy, the risk that the Libra Association will start to implement a fractional reserve system and generate tokens from nothing which are not covered by reserves, the negative impact on global financial stability, the excessive concentration of power in the hands of Facebook, the use of Libra for money laundering or the financing of illegal activities, the failure to comply with regulations and the unpredictability of the impact that this innovation could have on the current financial system.

On the other hand, however, even among those who expressed favourable opinions, many do not hide the fact that at least some of the above concerns are legitimate, but in this case, the regulatory and supervisory authorities are asked to ensure that none of this can really happen. 

In contrast, the positive aspects often include the reduction of transaction costs, the possibility of use for hundreds of thousands of people without a bank account, the inclusiveness and globality of the project and the freedom for individuals to issue money. It still remains to be understood how the privacy issue will be solved, provided that it is actually solved. 

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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