A “Zuck Buck” is displayed on a monitor as David Marcus, the executive leading Facebook’s blockchain initiative, is questioned by U.S. lawmakers in Washington, D.C., on July 17, 2019.
Date: October, 21st 2019
Media: CNBC
What happened?
Facebook has suggested its Libra project could use multiple cryptocurrencies backed by different existing currencies like the dollar, rather than having one single digital token tied to a basket of currencies. Instead of having a synthetic unit they are using a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stablecoin, etc. These currencies are focused on reducing the volatility observed in virtual currencies such as bitcoin and others. With this project they want to create a more efficient cross-border payment system.
Whom and where it affects?
It would affect the whole world, specially most developed countries where most of people have access to internet, it will also affect the international banking and financial system. Although People still aren’t very familiar with this cryptocurrencies, they are gaining popularity and it’s a reality they will become more important with time.
What sort of public or private institutions are involved?
The Association libra, the hand that guides the nascent cryptocurrency, is composed of partner companies. The Libra Association will be an independent non-profit organization based in Geneva, Switzerland. Its aim is to coordinate and provide a framework for governance on the Libra network and to reserve and guide grants of social impact in support of financial inclusion. The association is constituted from the net of nodes validators that manage the blockchain Libra. Its members will consist of geographically distributed and diversified enterprises, non-profit and multilateral organisations and academic institutions.
Why is it important for Banking and Finance?
It is important because basically this new system will be backed up by different existing currencies so only for that reason it will affect traditional banking and change it in the way people percieve money, this change has already began with other cryptocurrencies that exist already, so every time people fear less to this new concept of money and for sure its going to be the future of our finances.
What do you think will be the consequences in the foreseeable future?
The advantages of this type of money is that is an excellent alternative for many people who have to send money. Apart from being a currency with a limitation in its issuance, they allow that before the increase in its demand its price has risen and therefore becoming an excellent investment. It is also a technology that allows you to create automatic rules to money. All these great advantages allow us to predict that its use will continue to grow.
We can see many transactions that are made, new very powerful players that are entering, new projects that are emerging, after all, it is our day to day, and all these are very strong indicators that we are on the right track.
Today may not be the best system in all situations, but it is certainly an unstoppable evolution. The spread of bitcoins in the world as a global currency is already a reality, the development of solutions that solve some gaps is already underway, the revolution that the blockchain has brought and is also bringing to other sectors, beyond the systems of payment, is constantly increasing.
All the largest companies have already realized the value of that technology and are focusing on solutions to implement them in their businesses.
Key words:
Cryptocurencye, Blokchain, Stablecoins, Bitcoin and Volatility.