If we think that the word “Libra” in Spanish is equivalent to “pounds”, then the title of this article acquires another connotation, since indeed, Libra, the cryptocurrency backed by none other than the all-powerful Facebook, is precisely losing all its weight, all its value.
Libra was going to change everything, or at least that was what was believed when Facebook presented it in June 2019, where it was shown as a global currency backed by dozens of agencies and digital platforms. Almost a year later, many of the companies that supported it have left and the need to adjust to regional regulations has made Facebook completely change the initial approach it proposed for this project.
As officially announced on the website of the currency itself, Libra now changes its initial idea from being a stablecoin to being a kind of payment network in which it will be linked to the local currencies where it operates and therefore to the frictions and problems that have always occurred when using different currencies. However, in order not to make this explanation too complicated, what is really happening is that Libra is going to become a payment platform very similar to PayPal.
Regarding this, let’s cross our fingers on how it works, because although Paypal is perhaps the most used payment gateway worldwide, it is also an unpleasant and arbitrary company with its users, with which we work simply because it is almost a monopoly and not by choice, then, taking into account that Facebook is in your area, perhaps equal or more arbitrary, it is very likely that the payment platform derived from Libra, is not a very good experience for everyone, although that will remain to be seen.
On the other hand, what Libra proposes, is the use of different stablecoins with each of them backed by an already existing and regulated currency such as the Euro, the Pound or the Dollar. There will be a single “currency” within Libra but it will not be a cryptocurrency as such, but a digital system formed by the existing stable and regulated currencies. To give an example, when you send a pound to someone, you are actually sending fractions of dollars or euros.
The agonizing disappearance of Libra
Being a global currency was the great bet of Libra, which differentiated it from the rest of the currencies and also made it promising against other cryptocurrencies because of its own programming language or the opaque reserve, but this gradually faded away over the months. by the concern of governments and economic organizations regarding cryptocurrencies.
Let us remember well that it does not sound good at all to banks around the world that people can manage their resources freely without their intervention. Enslaved to the banks we look much better, or at least that is what the great bankers of this world undoubtedly think.
So from the beginning, in Libra they made it clear that they were not going to launch until they had satisfied the regulators, and unfortunately the regulators were never satisfied. In the U.S., Facebook was asked to stop the launch of its cryptocurrency, the European Union’s antitrust regulators investigated the matter, and France pointed out at the time that it “threatens the monetary sovereignty” of the European Union.
Although to tell the truth, you never know if all these regulations against the Libra project, freed us from a worse evil among all the existing evils.
As if this were not enough, in October 2019 the platform was hit hard by losing support first from PayPal and then from other big players like Visa, MasterCard or eBay. The concerns of governments and the fact that Facebook was behind it (as much as they said they were not going to intervene) increased concerns about privacy and that in this issue of data management, very few people trust Facebook after the unforgettable episode of Cambridge Analytica.
Finally, it takes more than having mountains of money for a project like this to evolve and grow. In theory Facebook has everything to succeed with any project, but in practice the reality is different and it is well known that Mark Zuckerberg is not King Midas and not everything he touches turns to gold.