Sindreu believes that from the characteristics of Facebook's Libra, it is more like a type of money market fund that existed 50 years ago than Bitcoin. This type of fund has been subject to strict regulatory review since the 2008 financial crisis. Investors should be cautious and skeptical.
- Is there an internal contradiction in the Libra Association? Foreign media: At least 3 members are considering launching
- Babbitt Column | Yang Wang: A Three-point Economic Discussion on Libra
- Facebook "Stable Dollar" cooperation node is exposed in advance and will be piloted in more than ten countries around the world.
- Is the draft bill issued by the US aimed at Facebook's Libra program?
- Facebook Appoints Engineering Director of New Blockchain Division or Trys to Improve Social Network Data Security and Related Services
- Facebook Libra applies for payment system license to Swiss Finance Authority (FINMA)
Opponents of the sharing economy often ask such questions, are companies such as Uber and Airbnb offering new sources of value, or are they only temporarily using the blanks of the law? For Libra, it is likely to belong to the latter.
Bitcoin allows everyone to record and verify transactions, while Libra is determined by Facebook which organizations can do this. In addition, Libra's price does not fluctuate significantly due to the support of multi-currency funds, it also allows issuers to get real returns.
This setting is very similar to the money market funds used by many companies and investors to manage cash in the early 1970s. In addition to fixing the value at $1 to make it look like cash, these funds put their clients' money into ultra-short-term debt that can be easily cashed to get some extra returns.
Facebook can also do this through Libra. Libra users benefit only from easy transfers and transactions. Facebook believes this will be very popular in countries where banks are not popular. But just this week, regulators in many countries, including Japan, the United States, and the United Kingdom, expressed concerns about Libra.
Money market funds have been an integral part of the shadow banking system in the last century, but the 2008 economic crisis has caused short-term financing to collapse in the global financial system. In the US and Europe, regulators have spent ten years tightening such funds.
For Facebook, when Libra is involved in a lot of money, the regulator will eventually intervene. Not to mention other potential regulatory issues such as anti-money laundering agreements. Either way, even if consumers can find the practical use of Libra, Facebook still needs to solve many new problems. But investors should not be fooled by temporary regulatory loopholes. (than push)