Libra Association vice-chair, Dante Disparte says the proposed project and bitcoin (BTC) aren’t in direct competition. The Libra Association executive maintains that Libra can provide robust payment solutions much better than the popular crypto.
Meanwhile, crypto stakeholders are joining mainstream actors to pick holes in the value proposition for Libra. For some industry insiders, the existence of a Libra Association controlling the proposed currency points to centralization which in turn echoes the current mainstream financial matrix.
Bitcoin Isn’t a Payment System, Libra is
“Bitcoin as an asset class has proven that mathematical scarcity can support an incredibly exciting asset. It’s not a means of payment. It just isn’t.”
Currently, no consensus exists on the argument about whether bitcoin functions best as a medium of exchange or a store of value (SoV). Proponents of the former use case point to the increasing number of Bitcoin ATMs and avenues that accept the top-ranked crypto around the world.
However, critics of BTC as a medium of exchange argue that slow transaction speeds scupper any meaningful utilization of bitcoin for micropayments. Instead, some commentators say BTC works best for cross-border transactions.
On the SoV side of the debate, proponents say bitcoin shows characteristics of haven assets especially during times of political and economic unrest. Critics like Peter Schiff counter with the sometimes-wild price swings and the relatively small market capitalization compared to mainstream haven assets like gold.
Libra Will Foster Greater Financial Inclusion
For Disparte, Libra’s value proposition goes beyond being better than the most popular crypto as a payment gateway to being a tool for greater financial inclusion across the globe. Commenting on Libra’s commitment to open up the global payment infrastructure, the Libra vice-chair opined:
“The bottom rung of the ladder of economic mobility is payment access. How do you drive mass adoption? How do you remove insidious levels of friction that basically make it cost-prohibitive to give people access to payments?”
Part of the argument for Libra as a tool for greater financial inclusion comes from Facebook’s backing of the project. The social media behemoth reportedly has about 2.4 billion users which provide a massive scaling opportunity for both Libra and its Calibra wallet.
Back in September 2019, Libra Association chair David Marcus responding criticisms of the project highlighted that Libra wasn’t “new money” but was instead, a reinvention of the current global payment matrix.
Marcus also doubled down on his assertions s previously reported by Blockonomi, calling blockchain payment protocols the only true “game-changer.”
Critics Still Rail Against Libra’s Perceived Centralization
Libra has come in for a lot of criticism from stakeholders in mainstream finance. Even crypto industry insiders have taken shots at the project with Ripple chief Brad Garlinghouse saying Libra will not launch in the next three years.
Appearing at the CES, Decred’s Akin Sawyerr also poked holes at Libra’s assertion of revolutionizing the global payment system. Sawyerr highlighted the centralized nature of the project as offering nothing different from the current payment status quo. Commenting on the matter, the Decred strategy chief, quipped:
“I’m not convinced that a council of self-interested companies can do money better than a decentralized system. The only way to really get there is to empower the individuals to have some base-level sovereignty.”
Back in 2019, early Libra backers like PayPal backed out of the project citing regulatory concerns. Several governments and regulatory agencies have expressed a desire to block the project with countries like China moving forward with their own central bank digital currency (CBDC) plans.