Facebook recently announced their attempt on releasing Libra, the cryptocurrency that will be like bitcoin in some terms but will be pegged to various aspects hence making it more stable. The growth of bitcoin has been tremendous along the years, and an addition to the cryptocurrencies available could change the world. But a recent tweet from the President of the United States, Donald Trump has left everyone wondering about the future of the cryptocurrency.
Trump vs Libra
Trump said that he isn’t a fan of Bitcoin and any other form of cryptocurrency since their values are highly unstable and based on thin air. The second tweet that Trump made points out to Libra, saying that Facebook’s ‘virtual currency’ will have very less dependability. He says that if companies like Facebook want to function as a bank, they need to look for a Banking charter and abide by all banking regulations just like all the banks do. He says that the USA has only one real currency and it is the most dominant currency in the world, and nothing can change that.
...and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!— Donald J. Trump (@realDonaldTrump) July 12, 2019
Response from Federal reserve
This week alone Libra has faced multiple detractors. Jerome Powell, the head of US Federal Reserve told the lawmakers that the central bank has concerns regarding the functionality of Libra. He also mentions that the Federal Reserve System and Financial Stability Oversight Council have a meeting to talk about Libra along with global policymakers.
What Facebook has to say?
The head of Facebook’s messenger department and the Libra Project, David Marcus says that Facebook won’t be the sole operator of the cryptocurrency. An organization, Libra Association that consists of Facebook and some of its partners, will be the managing team for the project.
The list of the partners includes companies like Mastercard, eBay, PayPal, Vodafone Group, Union Square Ventures, Andreessen Horowitz and Lyft
Bitcoin vs Libra
The most notable difference seen is in Bitcoin’s decentralization. No entity controls Bitcoin, whereas the Libra Association will control Libra. Likewise, Libra is tied to real-life assets and national currencies. So, the value will depend on the governmental control and effects of currencies fluctuation.
On the other hand, Bitcoin isn’t pegged to any of these assets making its value questionable. Similarly, Libra will initially operate on a permissioned blockchain, that means the miners will need approval before mining. But, Bitcoin’s blockchain doesn’t require permission, and thus the miners have a free choice of mining.
According to recent reports, Libra is scheduled to launch within the first six months of 2020.