Vice President of Tsinghua Wudaokou Finance College: Libra wants to become a credit currency and must gain market trust and thus have a value storage function.

According to the China Business News, Professor Tian Xuan, deputy dean of the Wudaokou Finance College of Tsinghua University, said in an interview that the currencies issued by countries in the world are basically credit currencies. Libra is supported by bank deposits or short-term government bond mortgages, so it is not a credit currency like the US dollar and the RMB that we usually understand. Libra wants to be a credit currency, must gain market trust, and then have a value storage function, and ultimately used as credit, which is not something that can be achieved overnight. From this perspective, Libra wants to become a new currency and build a wide range of financial formats around it. It is not realistic in the short term and still has a long way to go. The biggest problem facing Libra's development is the resistance from regulation. For this new format, there are still many controversies about who will supervise and supervise which areas. Concerns about Libra by financial regulators in various countries have focused on anti-money laundering and counter-terrorism financing, privacy protection of transaction data, requirements for fiat reserve custodians behind Libra, and redemption requirements between assets and digital currency exchange. As long as the supervision of the above risk points is not clear, the dispute over Libra's security will continue and the market will not be able to give Libra full trust.