Facebook’s Libra; a New Cryptocurrency or a New Digital Asset?

Facebook’s cryptocurrency is called Libra. This cryptocurrency is among stablecoins; that is, currencies which are backed by dollar or real currencies. There are many discussions raised about Libra and these days, all eyes are on Facebook. Some believe that putting Libra in the category of currencies is not correct and they don’t consider them a cryptocurrency in the digital world. But what is the reason? Which factors are effective in public sensitivities about Facebook’s stablecoin? Can holding the users’ information in such a strange volume be a reason for Facebook’s performance in the world of cryptocurrencies?

Why Isn’t Libra a Cryptocurrency?

Although there are some differences between different definitions of cryptocurrencies, all are in agreement about Bitcoin and its peers’ resistance to censorship and centralized surveillance. But Libra is not included in this defininition and cannot be active in a decentralized network and infrastructure. It is stated that as time passes and after that Facebook becomes established in the market it will change into a more decentralized network. We should wait and see to some extent this claim is true and whether it will get practical or not.
The other reason that some look at Libra suspiciously is the way it is priced and valued. It is not mathematical principles or the market which determine the price of Libra, but they are considered a digital representative for a basket of real currencies and it is different in case of valuing and price from Bitcoin and common cryptocurrencies. The only commonality between Libra and other cryptocurrencies is its activity in the infrastructure of Blockchain. This means that all of them act based on Blockchain network.

What Has Been Defined as Libra’s Mission?

Some of those who agree with Libra believe that real currencies such as dollar have previously been backed by dollar, but it is totally different about Libra. Since this stablecoin has a support like dollar which behaves differently from the gold regarding the viewpoint of surveillance and control. Dollar is a currency which is printed and distributed by the state and special supervisors in the world and the method of pricing and valuing it is completely different from gold. These issues show that apparently, Libra cannot be considered as a currency through which it is supposed to simply do financial transaction around the world. In fact, there is a little doubt between a currency which is capable of being transacted and activity as a digital asset. In this case, it cannot be expected that Libra would be that cryptocurrency that Facebook claims to comfortably be used in financial transaction among users through public and simple infrastructures like different messengers in the next few years.

Will Libra Succeed?

Despite many suspicions and questions about Libra, remarking generally and absolutely about it is not possible yet. All cases pointed out had surely been evaluated and investigated by the big company Facebook. This company might have alternatives for all these questions and suspicions, but the time is yet not ripe to announce them. Anyway, this idea that via a stablecoin or a cryptocurrency and a messenger, money transfer and transaction are possible all around the world is very attractive. 
 

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