This article was first published on Stories by OAX on Medium
By Raphael Tressieres, Business Development Director and Paul Li, General Counsel at OAX Foundation
Both mainstream and blockchain media last week reported extensively on Facebook’s announcement that it is planning to launch its own digital currency. This announcement is a significant development in the digital asset space as it represents a level of institutional interest and potential uptake that goes beyond even what was announced by JPMorgan earlier this year. While we, at OAX Foundation, welcome the potential boost that such developments may have for digital asset and blockchain mass adoption, we have identified many questions which may arise from this project, based on the information currently available. In particular, we note our concern that a corporation (or a group of corporations) controlling the flow and use of both data and money would have a position too dominant in society, with the potential to become overly influential and to wield greater influence on many established governments.
Based on the information which has been released to date, we do not consider the Libra proposal to be a true cryptocurrency. Instead, we see Libra as being half way between the traditional central bank currencies and true cryptocurrencies such as Bitcoin or Ethereum. It is also quite clear that, at least for the initial phase of the project, it won’t do much to promote decentralization, openness, and trustlessness: underlying principles of the development of blockchain and digital asset technologies. From a conceptual point of view, given the centralized control over the value of each Libra in its current proposed form, it may actually be better to consider Libra as analogous to the frequent flyer miles offered by many airlines with a cryptographic technological element providing the infrastructure support for its deployment, with fungibility with fiat currencies as main difference. Given the numerous summaries ...
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