The Libra cryptocurrency has several advantages over Bitcoin and has the potential to become truly global.
Firstly, Libra is a stable coin, a cryptocurrency that is tied to stocks of fiat (real) national currencies or goods, including the financial resources of Facebook. Such powerful provision of the coin will significantly reduce the market volatility of this cryptocurrency. Bitcoin does not have such capabilities. As a result, Libra will be of minimal interest to speculators, and maximum – to users, which will make Libra a truly massive means of payment and an asset for savings.
Secondly, Libra, using Facebook, can potentially count on the involvement of millions of users using WhatsApp, Messenger and Instagram messengers. Bitcoin loses significantly in this regard, as it does not have a mass platform for a wide range of users.
Thirdly, Libra, as a stable global currency, can lead to currency substitution of the local currency in many states that have their own currency lacking constant stability. Citizens of such countries will seek to exchange local currency for a more stable global currency as a means of saving. Bitcoin can never become a truly global currency.
In the fourth, as a consequence of the third paragraph, the Libra can become a single “super-sovereign” global currency. Based on the interests of ensuring the stability of the international monetary system, this option is the most preferable solution. This option is better than the option in which the currency of one sovereign state becomes the main global currency, since there will be no political influence on the currency. Bitcoin in this case is not a competitor.
As a result, Libra not only poses a threat to Bitcoin, but can also become its grave digger.
By the way, the world has already thought about a new global currency. This month we saw a head-turning speech from Bank of England governor Mark Carney, where he asserted how the world needed to end its risky reliance on the U.S. dollar. He went further to suggest the potential of a Synthetic Hegemonic Currency, through a network of central bank digital currencies. In a Forbes report, China’s rumored state-backed cryptocurrency was said to be partnering with seven institutions including the Bank of China, Alibaba, Tencent and Union Pay.
As they say, the ice has broken. It’s only the beginning….