Big governments and central banks want to kill Libra and Bitcoin, and eventually all cryptocurrencies.
There are official and unofficial reasons for that. The official reasons are well known. They range from national security concerns and investor protection to liquidity, and are well justified, according to Lars Seier Christensen, Chairman of Concordium, the world’s first ID/KYC-ready business blockchain network.
“Libra is supposedly going to be backed by ‘safe’ assets such as money market instruments, fiat currencies, and short-term government bonds,” says Christensen.“If Libra is very successful this will lead to massive pools of such instruments and create liquidity problems, both for the instruments and for the Libra consortium should they need to liquidate fast, for example in the case of a run on the Libra currency. This happened to much smaller money market funds (that “broke the buck”) during the financial crisis, so it could easily happen here.”
Then there are technology failures. “The technology presented so far is simple, at a Bitcoin level, if not below, and hardly suitable at this time to support a complex monetary system, spreading across the globe,” adds Christensen. “Presumably this will improve with time, but who controls that?”
But there are unofficial reasons for the war that aren’t so well known.Big governments and central banks cannot tolerate Libra and Bitcoin, because they threaten to break their monopoly on printing money, and to manipulate the economy to accommodate the interests of powerful elites.
"Government and central banks are after Bitcoin and Libra because they reduce their ability to control markets and populations, while also making some of what they do irrelevant,” says Dave Hodgson, Director and Co-founder of NEM Ventures, the venture capital and investments arm of the NEM blockchain ecosystem. “It is uncomfortable when people ultimately realize that the emperor has no clothes.”
Iain Wilson, Advisor at NEM Ventures, agrees.“Public blockchains are inherently decentralized which empowers individuals and enables radically different business models,” says Wilson. “This has major ramifications for the ultimate centralized entities - big government, big corporates and the guardians of the banking sector: Central Banks. Balancing power between these two poles will require major public policy debate and potential clashes. This is what we are starting to see.”
There are official and unofficial reasons for that. The official […]
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