A rather inspiring presentation from the head of Facebook’s Libra David Marcus seems to have inspired someone else as well and neither more nor less – Coinbase CEO himself. Yes, you’ve heard it right, Brian Armstrong came out as a real supporter of this, still developing stablecoin.
The thing is that Libra is often represented as a project that carries labels such as “alienating”, “controversial” or even “poisonous”. Even though it still hasn’t come out at the light of the day, it has already gained a lot of opponents who are afraid that one cryptocurrency, coming from such a company (with heavily deranged privacy issues), has plans of the world financial domination. However, it seems that it has at least one supporter now.
On Wednesday, Armstrong tweeted a message of support, saying Libra is one of several important crypto projects:
It’s hard for me to understand the difference between libra and just having a money market account at FB. It’s a cash account with a blockchain wrapper, right? It’s a path to being a bank with being regulated like a bank – I can see value for FB on that front. — Craig DeWitt (@CryptoCwby) September 25, 2019
It’s pretty interesting that a man of Armstrong’s experience doesn’t see why Libra had such a negative feeling surrounding it from the very beginning. Nobody has (except maybe Armstrong) forgotten 2018 with its Cambridge Analytica for which the company was slapped with $5 billion fine for breaching the privacy of its users.
FTC Chairman, Joe Simons then said:
“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices.”
And while the situation with Cambridge Analytica was pretty much characterized as “misbehaving”, the truth is that Facebook has problems of a technical kind and that it betrayed the trust of its 87 million users. Libra as such – is primarily a Facebook’s project and represents everything that is “kaput”.
Moreover, for many crypto enthusiasts, Libra itself represents an ideological antithesis: it’s centrally controlled, linked inherently to the financial industry, and ruled by a group of big companies who were not democratically (or in any way) selected. It’s pretty easy to understand why it’s not really nice and dandy.
Be it as it may, Armstrong obviously read Marcus’s blog where he describes the reasons why Libra exists mentioning everything from the protocol and legal systems to the reasons why they should be replaced.
Specifically, Marcus blames the existing “money networks” for being closed and not well interconnected and adds:
“Some of these systems were built in the 1960s and 70s, and while they’ve received upgrades since then, they often live on top of legacy, fragmented infrastructure.”
If we didn’t know better, we could have decided that Marcus is preparing for a philosophy exam when saying that unnecessary banking mediators limit reach, and efficiency, while, at the same time, they raise costs dramatically. Marcus doesn’t stop there but he illustrates the transaction flow between two members of the Libra Association, explaining that the process is so much better than the traditional method used in bank transfers, resuming:
“Long story short, building on top of existing rails and across disconnected payment networks won’t reduce cost, open up the market to more innovation, nor lower the barrier of access to modern financial services as much as building a new infrastructure with a very stable, high quality global medium of exchange supporting it.”
Almost every crypto fan would agree that the world needs a new financial system still, whether Facebook is able to be the main provider – we’re not so sure.
Also, people are still faithful to that traditional banking system and a recent survey conducted by ING THINK revealed that 66% of Europeans would refuse to use a digital currency, like Libra, to transact across social media.
Facebook’s CEO Mark Zuckerberg said he is sure that Facebook has matured enough and it is time for it to become socially responsible. Two days ago, ECB Board Member Benoit Coeure called Libra a “problem solver”.
Though this story is over, it’s worth mentioning that Armstrong’s support can be just one small step for a man but a giant leap for Libra.