In an interview with Forbes, the CEO and Founder of blockchain company OptDyn Alex Karasulu stated that Facebook’s global cryptocurrency is a payment system that represents a ‘better version of PayPal’ and that It cannot be compared to liberating currencies like Bitcoin.
The CEO called the Libra foundation a cartel, as the project’s blockchain is a permissioned network that requires all members to be authorized in order to participate. While PayPal has recently decided to leave the Libra Association, the Libra Foundation still has 100 corporate entities that act as transaction validators in the blockchain network. Karasulu regarded the centralized aspect of the system as a ‘cartel’ that will not be accepted by ‘diehard Bitcoiners and crypto-anarchists’.
Furthermore, Karasulu believes that Libra does not represent a currency that liberates transactions from financial oversight in the eyes of cryptocurrency enthusiasts. He notes that Libra cannot be compared to projects that provide that feature, such as Bitcoin, ETH, XRP, LTC, and others.
Commenting on the value of the cross-border stablecoin cryptocurrency, Karasulu states that it does not provide users with a store of value type asset, an attribute that may attract investors who are concerned with the inflation of traditional fiat currencies. Instead, the Libra Reserve is backed by fiat currencies, which indicates that the currency’s value may be affected by Central Banks.
Seeing major differences between Facebook’s centralized digital asset and blockchain protocols such as Bitcoin, Karasulu said that Libra does not have the ‘ethos’ that blockchain technology provides. “it’s empty and soulless to mot cryptocurrency enthusiasts but they’re sure to see traction because billions of users exist on Facebook’, says Karasulu.
Libra will have a major impact on the crypto sector
Despite the disparity, OptDyn’s CEO believes that Libra is a major threat to cryptocurrencies. He notes that the masses who use Libra will not know the difference between Libra and other cryptocurrencies and that they will not be aware that assets such as bitcoin act as a ‘liberating cryptocurrency.’
On another note, the CEO of Interlapse Technologies, Wayne Chen, believes that Facebook’s digital asset will have a major influence on major cryptocurrencies. Chen stated that despite the obvious technical differences, Libra’s stability and success will affect major cryptocurrencies solely due to the fact that Libra is associated with the sector.
Zuckerberg faces hardship as Facebook struggles to reach compliance
Nevertheless, the fate of Libra will be put to the test in the following months as the digital asset requires regulatory approval from multiple political and financial entities before it can be launched. With PayPal withdrawing its membership and rumors of Visa and Mastercard following the company in its step, the future of Libra does not seem optimistic.
Based on an announcement from Congresswoman Maxine Waters, Mark Zuckerberg will once again appear in front of the U.S. Congress in October. While Facebook’s CEO will talk about the company’s current position in the housing market, since Facebook previously had a discriminative advertising system, he will also discuss Facebook’s plans of launching Libra.
According to Wayne Chen, Facebook’s intention to break the monopoly on printing money is the main reason behind the ongoing regulatory scrutiny. ‘With over 2 billion global users on Facebook, issuance of a new digital, global currency by a centralized corporation can seem overpowering’, states Chen.