Editor's note: On June 27, 2019, Mutual Chain Pulse organized a private event on Libra in Beijing, inviting many scholars, entrepreneurs, and government agencies directly involved in the blockchain field to discuss Libra. At the time, Libra had published a white paper for the past nine days, and its direct influence has already been talked about a lot. Therefore, this private enjoyment will focus more on how China responds.
Since this meeting is a private meeting, not everyone is willing to discuss the content publicly. The inter-chain pulse only selects the content that the guest authorizes to disclose, in order to readers and share the insights of experts.
The following is the sharing of national special experts, Beihang Bodao, and MIT Bachelor of Science and Technology:
Many people say that Libra will replace the French currency, but my opinion is the opposite. I think Libra is for legal currency. Who is this currency, it is obvious.
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In 2018, on July 18, IBM decided to issue a stable currency supported by the US government. The US government's attitude is very open, allowing the issuance of digital dollars, and the approval of Bakkt, indicating that the US government considers these to be legitimate business practices. As long as these products and exchanges are under government supervision.
Libra can be regulated. Many people say that blockchain is evading supervision, digital currency is evading supervision, but blockchain is becoming a weapon of supervision, including supervision of tax evasion and money laundering. Blockchain plus P2P network is the tool to evade supervision. Without P2P network, blockchain is the weapon of supervision.
If the US government believes Libra will threaten the dollar, Libra can be shut down in two minutes. The hegemony of the United States lies in the dollar. When the dollar is attacked, he is absolutely not soft. Grab this point and you can figure it out.
In July 2018, because I saw changes in the world currency pattern, I did not sleep all night. This is the day of the world currency revolution, because after this day, the French currency is equal to the traditional French currency + stable currency .
The future of the French currency is the traditional French currency + stable currency. Libra is not the only one. I thought this way. As early as September 2016, after I went to London to visit the Bank of England and other seven central banks, the Bank of England proposed digital legal currency, which was supported by other central banks. Later, the Bank of England did not continue due to technical problems. In fact, the British government and the US government did not think about how to do it themselves, but the great thing about the United States is that the government's views are realized in a folk way, which appeared in July 2018. Other similar projects appeared in 2019, including Libra.
This new type of currency has led to a new type of financial market, and the new financial market needs to be observed. But we can clarify one thing, engage in the blockchain, not the currency, and the national development blockchain is not the national development currency circle. It is impossible for Bitcoin and Ethereum to replace the French currency. The digital legal currency recognized by the national development is the main route.
National central banks can use digital currency to adjust national economic activities, and digital currency is also a weapon for sovereign state regulation.
It should also be noted that the competition between digital legal currency and traditional law is quite different. The competition weapon of traditional French currency is interest rate and exchange rate, while the competition of digital legal currency is mainly the circulation and transaction speed of digital legal currency.
With such an idea, many views will change. In the past, I have been saying that the blockchain is a big change in the past 500 years, and the currency has changed in 320 years.
In summary, the real stable currency is the stable currency supported by the state. It is based on French currency. Blockchain technology can be used on traditional French currency + digital legal currency. A new currency situation has emerged.
Next, I answered some questions raised by my friends:
Question 1: Why does the Fed have support for the Libra project, but the US Congress and European financial regulators do not support it?
Cai Weide: There is a competitive relationship between Europe and the United States. One of the purposes of the establishment of the euro was to compete with the dollar and even hope to replace the dollar, but the euro did not succeed.
After Libra came out, Europe as a whole was opposed, and the Bank of England was also opposed. The Bank of England says Libra can come, but the deal in the UK is subject to UK bank regulation. Will Libra agree?
As for the opposition of US congressmen, this is a natural phenomenon. If all the institutions in the United States support it, what do people in other countries think?
The interpretation of all things must be based on one of the most important principles. What is the most important foundation of the United States? Not the US military, oil, technology, but the dollar.
Question 2: Libra is still built on the assets of the French currency. It is not the new value generated by the data of many native blockchains. Is Libra still just an excessive phase of digital currency?
Cai Weide: Can you imagine that the United States says that the dollar is not going to be used, is Libra good? I don't think so, this is impossible.
Some people think that Ethereum, Bitcoin and other digital currencies will replace the US dollar. This is impossible. The United States will jump out and block it. For example, the bank accounts related to Bitcoin and Ethereum all wallets are frozen.
Question 3: After Libra is released, will it bypass regulation and enter China, how to operate technically?
Cai Weide: You can go around in China. There are many third-party payment systems in China, and there is one more libra. China can legislate not to buy libra, but libra may also be used when buying foreign assets. It is quite difficult to fully supervise.
Question 4: Does it have an impact on China's current financial system?
Cai Weide: There will be no substantial impact on China's financial system in the short term, but the entire financial structure has lost the first time in international competition.
Libra is not just an Alipay supported by 100 institutions. 100 nodes are just the beginning. Because of the money that can be made, more and more organizations are willing to join the Libra system. It is understood that many Chinese institutions have been willing to join the Libra node. This expansion model is much faster than Alipay. In the past, EOS had no legal digital tokens. Some Chinese consortiums competed to join the node. This time, it is a stable currency that is legally compliant abroad, and may be the world's largest stable currency. Everyone can think about it.
In addition, in its white paper, in order to serve users who do not enjoy traditional financial services, these users are coincident with users in many countries along the Belt and Road. How does this relationship with the Belt and Road strategy?
Question 5: Why does Libra choose a basket of multi-national assets as a reserve shield, which will bring difficulties in currency stability and financial stability?
Cai Weide: Libra can only be pushed out with only the US dollar. Because this will obviously strengthen the dollar hegemony, so I have to retreat and secondly anchor with other assets. Such other countries may be barely acceptable.
Question 6: Facebook currency makes central banks “tight”, is it possible for Ali and Tencent to issue coins?
Cai Weide: At present, the supervision has not let go of the enterprise to issue money.
Question 7: Libra's portfolio of currencies determines how you plan to execute, and will it take a long time to centralize decisions?
Cai Weide: This can be given to the Libra Foundation. It can also refer to the model of professional institutions such as the World Bank or the International Monetary Fund. This is not a very difficult thing.
In addition, this decision will be a central decision. Today's digital currency includes Ethereum, Bitcoin, EOS, which is not the center's decision. Which one is decentralized? For example, the core code of the bit ratio is a small group of core personnel to manage.
Question 8: Will Libra be decoupled from a basket of currencies in the future, just like the dollar decoupling gold, forming a new credit currency?
Cai Weide: If it is decoupled, the Fed will use various forces to get Libra out of the market the next day.