Wang Yongli: Is Facebook's cryptocurrency really so god?

In recent days, there has been a lot of information about Facebook (FB) launching its own cryptocurrency in the first quarter of 2020, such as "Facebook cryptocurrency will have a huge impact on the existing financial system", "FB digital currency partner complete The list of exposures includes 25 (most recognizable) companies in eight sectors (especially the international payment giants Master, Visa and Paypal have joined (the three are referred to as MVP) as the founding node, together with FB may include 2.7 billion global users, giving Great imagination), etc., spread widely, many people are full of expectations, and even think it will challenge the traditional currency of the US dollar (especially in developing countries) and the status of new network cryptocurrency such as Bitcoin; will challenge the tradition Cross-border payment giant Swift and the new network cross-border payment pioneer Ripple; will greatly improve people's overall understanding of cryptocurrency, accelerate the construction and widespread application of digital currency system; marking the non-state-issued digital currency application upgrade from 1.0 to 2.0, Blockchain, digital currency and the pass-through economy have thus entered the Internet and gold The main battlefield of science and technology will become the protagonist of the next stage of digital economy; after the release of digital currency, FB will acquire a new profit model, become the central bank of the global digital economy, establish the FB digital economic empire; must realize that if the digital economic revolution In this new phase, China cannot actively participate, not only will it be completely passive in the new competition, but the advantages already gained in the field of Internet and financial technology may also be lost.

So, what exactly is the "cryptocurrency" of FB, is it really so god?

In fact, FB has not released its "cryptocurrency" white paper, but according to the information already transmitted, this "cryptocurrency" has been called "GlobalCoin" (global or international currency), and may now be officially called "Libra". "("Libra" means fair and just). FB has specially registered a company called “Libra Network” in Switzerland in May this year. Libra is not like JPMcoin launched by JPMorgan Chase Bank, and the stable currency USDT, GUSD, etc. launched by the Internet company. It is only linked to a legal currency of USD 1:1, but is linked to a basket of legal tenders (similar to the International Monetary Fund. SDR, Libra also approximates Libor in terms of pronunciation, that is, the London Interbank Offered Rate. Of course, the specific currency composition of the currency basket and its component coefficients are still unclear; to strengthen the management of this currency and enhance fairness and fairness, FB is initiating the formation of an independent management foundation; Libra will be used and operated on the blockchain network platform system built by FB, which is expected to launch 100 verified transactions and record and participate in network governance (rule adjustment) The node of the right, each node needs to pay a membership fee of 10 million US dollars.

From the above content, FB first needs to use blockchain technology to create a decentralized franchise chain network system and establish the management rules of the system; in this network system, instead of running various legal currencies, run itself The dedicated cryptocurrency Libra; Libra is not like Bitcoin, it needs to be "mining", but it needs to be exchanged for currency and supported by legal currency (an anchor); Libra is not only a legal currency, etc. The value is linked, but it is linked to a basket of currencies in order to adapt to the needs of multinational users and to weaken the control of a single country (in fact, JPMorgan Chase Bank also expressed this intention earlier). It can be seen that Libra is still a special token used in certain online communities or business districts. It still needs to be supported by legal currency, and it is impossible to completely replace legal tender. Moreover, such special tokens linked to legal tenders only port some encryption technologies to the traditional financial operating system, and do not really enter the new cryptocurrency field like Bitcoin and Ethereum. Of course, the emergence of various "stabilized currencies" linked to fiat currencies also indicates to a certain extent that the trust of large institutions in the "cryptocurrency" of a network such as Bitcoin is not enough or is not acceptable.

Compared with GUSD and JPMcoin, Libra may be more complicated in linking currency and system operation, but in essence, like GUSD and JPMcoin, it still belongs to a network-specific token, just as I commented on the WeChat public account on September 19 last year. GUSD pointed out: The US dollar "stabilized currency" is just a dollar token , and the same as JPMcoin on the WeChat public account on February 22 this year: "JPMcoin is still just a network token!"

However, there is no doubt that Libra is linked to a basket of currencies and will be more complex than GUSD and JPMcoin, and it will face more risk challenges . The most important thing is how to construct and how to manage its currency basket. How to handle the exchange of legal tender and special tokens, who bears the exchange rate risk and how to control it? How to form a competitive advantage and attract users and businesses more efficiently (even if FB existing users, it is not a matter of course to convert to Libra users)?

Following Ripple, more and more countries and large financial and network companies are working on building a network cross-border payment system, and launching their own network-specific tokens, including JPMcoin and Libra, which are reasonable, but this The situation will make users and traffic between different network systems more and more competitive.

In fact, when Gemini announced the release of GUSD and JP Morgan Chase announced the launch of JPMcoin, it also caused a lot of sensation in the society, which led to many grand ideas, but today, these tokens have not produced much actual reality. effect. FB's launch of Libra is just a new competitor. What is the actual effect? ​​There is still a big unknown.

More importantly, if the rules of each network system are not uniform and cannot be directly linked across the chain, it will inevitably affect the overall payment efficiency, cost and risk of the whole society. Therefore, the more cross-border payment systems with different rules, the less good it is. In fact, it is more important to explore a unified international rules and management system!

Re-emphasizing the February 22 public account: Large financial institutions or professional organizations actively explore the use of blockchain and other technologies to improve the payment and clearing system is worth encouraging, but in any case, continue to exist in the country, it is difficult to die for a long time In the case of it, it is unrealistic to replace the national sovereign currency or legal tender through the online digital currency; the “network stability currency” supported by the legal currency and fully anchored, no matter how its specific design changes, can only be Dedicated tokens running on a specific network platform are less likely to replace or subvert the fiat currency; the need to work hard to solve the actual performance and traffic problems of the network platform, rather than focusing on the design and packaging of dedicated tokens And hype; should strengthen the research and unification of online payment rules, and support the promotion of a unified global payment and clearing supervision system.

Therefore, it is not necessary to say too much about such a network "cryptocurrency" supported by legal tender currency, and place too high expectations!

Author: Wang Yongli

Source: Wang Yongli (WeChat public number)