Libra, which has neither blocks nor chains, has been withdrawn by five founding members

 Libra, which has neither blocks nor chains, has been withdrawn by five founding members

Five founding members withdrew

Facebook released a white paper on the encrypted currency project Libra on June 18 and recruited 28 founding members including Mastercard, PayPal, Visa, Vodafone, eBay, Lyft, Spotify and Uber.

A spokesman for Stripe told the media that it might be possible to work with Facebook in the future, but not now. Stripe is supportive of projects that allow people around the world better access to online commerce, and Libra has the potential to do so, he said. We will keep a close eye on its progress, and the door to continued cooperation with the Libra Society remains open in the future.

A spokesman for eBay said: We highly respect the vision of the Libra Association; however, eBay has decided that it will no longer be a member of the Association in the future.

This is a big impact for the newly established Libra project. Other heavyweight members are now under severe regulatory pressure to rethink the appropriateness of Libras support.

Master and Visa are the two largest payment and clearing institutions overseas. EBay is the largest digital payment company outside China. Stripe is a PayPal challenger in Silicon Valley and one of the most valued unlisted technology companies in the United States. After the five companies withdrew, only PayU, a financial payment-related company, remained in the Libra Association. PayU is a subsidiary of Naspers, Tencents largest South African shareholder, and it is far from being comparable in size to several of the exit companies.

Faced with the successive withdrawals of founding members, the co-founder of Facebooks encrypted currency Libra program commented that companies freely opted out of the Libra program.

We are focused on moving forward and continue to build a strong alliance that includes some of the worlds leading enterprises, social impact organizations and other stakeholders to achieve a secure, transparent, consumer friendly global payment system that breaks financial barriers for billions of people, said Dante disparte, director of policy and communications at Libra. We look forward to the first meeting of the Council of Libra Association in three days, when the first members of Libra Association will be announced.

Facebook CEO Zuckerberg will testify later this month on the House Financial Services Committee, when Libras encrypted currency program will once again be the focus of U.S. lawmakers.

LIBRA: No blocks, no chains

But in fact, the nature of Libras block chain is questionable.

First of all, the setting of Libra does not conform to the nature of block chains. Block chain is a new application mode of computer technology, such as distributed data storage, point-to-point transmission, consensus mechanism, encryption algorithm and so on. It is essentially a de-centralized database.

The unique advantage of distributed governance of Libras block chain is only theoretical, because first, the Libra block chain will enter the market in the form of full license and be effectively centralized controlled by the founder of Libra coin.

A defining feature of encrypted currency is its greatest attraction. It is not issued by any central institution and is theoretically free from government intervention or manipulation. But Libra is not only unable to be released by a central agency, but also not free from intervention and manipulation (at least not seen in the white paper).

Secondly, the reliability of Libra blockchain is questionable.

Libras new programming language, Move, will allow users to define their own smart contracts in the future. Intelligent contracts are coded protocols whose terms are automatically executed when a set of predetermined criteria are met.

So far, at least in a decentralized, encrypted currency environment, this programming language has proved very unreliable. This is partly because they are written in code rather than human language, which means that even if they are written by the worlds top programmers, they are extremely error prone.

In addition, in order to save costs and further improve efficiency, Libra administrators even put forward the idea of archiving data (possibly for a fee) to save space, which is a very hateful practice for technicians of block chains.

Third, what Libra really wants to do is what other online payers have done, or, more frankly, have taken the lead in the market.

A British media commentary said Libra did not seem to understand why people needed block chains or virtual digital currencies. Libras white paper seems to be an attempt to build a global online payment system, and there seems to be no reason to use block chain tokens to achieve this.

Chinas social media-transformed payment giant, Wechat Payment, does not use block chains. As Facebook, which has the highest homogeneity, wants to compete with them at the global level, block chains technology is a good starting point.

Regardless of the technical details, regulation is the big problem Libra needs to solve.

In Libras white paper era, the attitude of the United States and Japan was cautious, while that of the European Union and the United Kingdom was relatively neutral. Now, the attitude of the United States and Japan has become more stringent, while that of the previously neutral Britain and the European Union has changed dramatically.

The Bank of England said on October 9 that Facebooks encrypted currency, Libra, could be systematic and needed to be regulated.

The EU is taking a tough regulatory stance to prevent Libra from damaging the euro, another blow to Facebooks ambitions. EU Finance Commissioner Dombrovskis said it would propose new rules to regulate encrypted assets such as Facebooks encrypted currency Libra.

The questionnaire reflects EU concerns about Libras risks of financial stability, money laundering and data privacy. France and other European countries have vowed to stop Libras development, saying it poses a threat to the monetary rights of governments. European data privacy regulators have also questioned Libras potential huge reserves of personal and financial information.

Five founding members quit because of concerns about Libras regulatory prospects.

Source: Wind Information Responsible Editor: Yang Bin_NF4368