The introduction of Facebook’s Libra has been one of the highlights of 2019, but it was not smooth-sailing for the virtual asset. The Facebook-backed stablecoin received collective criticism from government officials, crypto-personalities and a majority of the community, with many questioning its potential use cases and characteristics as a cryptocurrency.
In the latest edition of whatbitcoindid, Peter McCormack discussed the regulatory side of Libra with Preston Byrne and Jake Chervinsky.
Jake Chervinsky, General Counsel at Compound Finance, stated that his first reaction was of concern when he first heard about Facebook’s plan for a cryptocurrency. According to him, it seemed like Facebook’s Libra was trying to hide its skeletons in the closet under the ‘virtual asset’ term as it did not reflect any characteristics of a cryptocurrency.
Chervinsky said,
“To me when you talk about crypto, it has to have three characteristics. You have to be permissionless, you have to be censorship resistance and you have to be trusted, minimized. And I didn’t see any of that coming.”
He added that his concerns were ‘confirmed’ once he saw Libra’s whitepaper, stating that it looked like a permission system allowing censorship and a system which the crypto-industry actually needed to avoid.
Preston Bryne, Lawyer at byrnestorm, put forth a similar opinion and described Libra as a “panopticon chain” which would be authorized and driven by several Silicon Valley companies that are not supposed to have exclusive data on the chain.
Bryne added that Facebook was trying to establish a system which echoed the principles of a “cartel” by offering a tangible, credible replacement to money, adding that it was really, really dangerous.
However, Bryne added that Libra looked more like security than a payment tool according to their structure, as it was backed by other companies and assumed that the general public will buy it as a form of long-term investment.
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