Xiao Lei: Is the US Internet giant announcing the issue of currency, conspiracy or strategy?

To understand the historical significance of the issue of Facebook currency, we have to start from the areas that everyone is familiar with.

At the 2017 Alibaba annual meeting, Ma Yun’s language is amazing. By 2036, Alibaba will serve 2 billion consumers, create 1 billion economic benefits and 100 million jobs, and become the second only to the United States, China, and Europe. Japan’s fifth largest economy in the world.

Indeed, as early as three years ago, the total transaction volume of the Alibaba platform has exceeded 500 billion US dollars, ranking 21st in the world according to the scale of GDP, and Argentina can be on an equal footing.

In fact, boosting Alibaba into the "helper" of the e-commerce giant, there is an innovative tool to make a great contribution, that is Alipay. According to the valuation, Alipay's parent company Ant Financial has more than 150 billion US dollars, which is already one-third of Alibaba's market value. It can be seen that Alipay plays an important role in Alibaba's business system.

Alipay as a third-party payment in China, and later on behalf of the mobile payment terminal, actually witnessed the continued rise of the Chinese economy. China's mobile payment has become a new format for Chinese business and a sign of the international financial consumer market. Whether it is Europe or the United States, or developed economies such as Japan, China has long been left behind in mobile payments. Many people say that developed economies have not started the era of mobile payment because they have very mature credit cards and traditional banking service systems. Therefore, the prevalence of mobile payment in China shows that China's traditional financial services are very backward.

Although I agree with this statement, the Western and developed countries have missed mobile payments, and their losses are heavy. China's mobile payment system has established a very popular modern underlying transaction architecture. The huge changes that this architecture has brought to the business can no longer be summed up simply by a financial innovation. In the fourth quarter of last year alone, the transaction volume of China's third-party payment mobile payment market reached 47.2 trillion yuan. You can make up the figure and I will not make other comparisons.

In addition to mobile payments, China's leap-forward development still exists in other industries, such as the phone. When China did not wait for the burst of landlines, mobile phones have become popular. Similarly, when our traditional credit card and bank payments showed a huge gap compared to the West, we completed the jump from counter payments to mobile payments.

But China can complete the jump, and other countries can. This is a very philosophical question. Mobile payment in developed countries is relatively backward. One of the reasons is that the opposition and restrictions of traditional financial institutions are just like airlines do not want high-speed rail. Therefore, in the future, China's mobile payment, if it wants to move forward, will be seriously constrained by mobile payment itself.

In fact, what I want to say is that because we have an extremely developed mobile payment market, we do not pay enough attention to "digital currency", just as developed countries did not pay much attention to mobile payments because of the development of counter finance.

Ok, I am here and start our focus today.

The US Internet giant Facebook, which currently has a market value of more than $120 billion in Alibaba, has announced the release of digital currency. If Alibaba is to become the fifth largest economy in the world, I personally feel that the first competitor is Facebook.

It is precisely because the developed countries such as the United States missed the era of mobile payments, they began to skip the development of mobile payments directly, and directly into the digital currency era. Therefore, many people in China may still feel that it is still a long time for developed countries to catch up with China on mobile payments, but developed countries are no longer focusing on mobile payments because the digital currency era is a new era. .

In a previous analysis, I specifically talked about Facebook's digital currency Libra based on blockchain technology. With the release of the entire white paper today, we can thoroughly explore the world currency that is about to be released from a macro perspective.

What is the essential difference between Libra and mobile payment? In addition to all the advantages of mobile payment, Libra has a lot of special features.

First, Libra does not go through a third-party settlement system, which means that Libra's transfer transactions do not require a bank; Libra is anonymous, users can quickly establish one or more addresses that are not related to their true identity; and second, serve Libra. Financial institutions are international, including MasterCard, PayPal, PayU (Naspers' financial technology department), Stripe, Visa; third, users can convert their own currency into Libra, or convert Libra into French currency according to the exchange rate; Fourth, Libra users use Libra to transfer money to each other, which is similar to sending a photo or sending a message to the other party. Fifth, Libra's non-profit operating agency is located in Neutral Switzerland (Geneva).

I don't have too much explanation about technology, because everyone only needs to know that Bitcoin, Ethereum, EOS, etc. can continue to operate. Libra's technical and organizational capabilities will only be safer and more efficient than theirs. Not weaker.

Everyone knows that the rise of Tencent's ecology depends on WeChat and WeChat payment. If the competition of the world's fifth largest economy starts from the Internet giant, Libra, which is brewed by Facebook, may be one dimension higher than Alipay and WeChat payment. Because the demand for commodity trading is limited compared to the demand for finance and currency, and the demand for financial money is unlimited, and it can accommodate and carry commodity transactions. That is to say, the opening of the supermarket, generally do not dry the bank, the bank does not do the money.

Global commerce will enter another competitive landscape due to breakthroughs in currency and payment systems. China's giants should have a sense of urgency. Libra will not have a huge impact in the short term, but don't underestimate the long-term impact, because we have witnessed this power from mobile payments.

In addition to the feelings of Libra's new economic and financial era, the feeling of reading Libra's entire white paper today is actually quite shocking, because Libra's white paper contains some unspeakable things.

First of all, the entire white paper does not mention anything in the United States, nor does it mention the US dollar, nor does it mention the US regulatory system and the question of what kind of structure to establish in the United States. But the founding members of Libra, all of them are British and American companies. I told you a case to understand that the hedge funds established by Soros in the United States made waves in the United States, and later encountered US warnings, but that means you can go to other countries to make waves and cut the leeks, but you can't be unscrupulous in the US market. Everyone knows the later story. Soros almost destroyed the pound and created the 1997 Asian financial turmoil.

The first feeling Libra gave me was that this is a completely controlled by Wall Street in the United States, and for the international market to upgrade the international status of the dollar, the US government is very fond of this kind of project, because as long as it is not targeted at the domestic, international The market is free to do it, and it is the best. It is impossible to leave the problem outside and not affect the United States. So I have a prediction that Libra will not be too popular in the United States, and will not even be issued for US users, but in other countries, especially in countries with unstable local currencies, there will be very fanatical pursuits.

Second, the white paper and the reserve assets and operating models behind Libra refer to gold, euros and Hong Kong (HKD) without mentioning the US dollar. From its strategic intent, the early use of a basket of currency deposits, as well as credible government short-term bonds as Libra's reserve assets, establish stability and reputation, but over time, will transition to a completely open system.

What does this mean? It means that Liza will have the potential to form its own value system in the process of tempting everyone to convert the French currency into Libra in the early stage, which requires credible reserve assets. My understanding is that one day in the future, Libra will decouple from reserve assets and become a new, independent world currency. Also similar to the 1971 US dollar after the completion of internationalization, the need to more flexible release restrictions, choose to decouple from gold.

The third is that the current Libra, everyone can understand the Hong Kong dollar model. There is no central bank in Hong Kong. Banks can issue money directly, but if you want to issue Hong Kong dollars, you must pay a fixed percentage of the US dollar to the Hong Kong government. The Libra issue in the next few years is the same. The global cooperation agencies can get Libra by paying enough legal currency to Libra. Then these cooperatives, like market makers, can carry out legal currency with ordinary users. Two-way exchange between Libra.

However, it should be noted that Libra's reserve assets are not a single currency, so the exchange rate is not only the exchange rate of the US dollar and the French currency in your country, it belongs to a basket of exchange rates, but I personally guess that the dollar still dominates the entire reserve. Therefore, this invisible will stimulate the exchange tide of global users. If the development is relatively rapid, the currencies of some weak countries may accelerate the depreciation or disappear, and even some governments may accept Libra to pay taxes and expenses. It may be several times the dollar.

At this point, I have some feelings that span time and space. The birth of Libra, with the birth of Bitcoin, has a very similar vision. When I read the Libra white paper today, I saw the expansion of the 2008 Bitcoin white paper. I even began to suspect that the two white papers were from The hands of the same group, or the promotion of the same force from behind the scenes.

If the 2008 Bitcoin white paper is to use a blockchain approach to tentatively create a technical currency that transcends sovereignty, then today's Libra white paper is actually a bit of a technically credible problem in the blockchain. Under the premise of proof of currency, a comprehensive commercial application. This is similar to the recent hot 5G network, which has entered the large-scale commercial phase after a long test of one or two base stations.

The 2008 Bitcoin white paper and today's Libra white paper are all trying to solve the same problem, which is worthy of our reflection. Because they also want to solve the problem of the transaction cost of daily micropayments, in the eyes of these developers, this problem seriously affects the popularity and inclusiveness of financial resources around the world.

Libra white paper excerpt (Google automatic translation) reveals the official motivation

Because of the developed countries such as the United States, micropayments must also pass through banks and credit card systems, so the cost is very high, but this problem has been solved by mobile payment in China. It can be said that our mobile payment in China only needs to issue a red envelope to solve the problem. The United States has to mobilize the bank settlement system to transfer funds. Because of this pain point, and the delay in mobile payment by traditional financial institutions, it can be said that it directly stimulated the birth of Bitcoin and Libra.

So what do we reflect on, what are we losing after we gain the advantage of mobile payment?

Text / Xiao Lei