Volatility determined by cryptocurrency extraction and speculation worries many, but those in the technology sector worry companies like Facebook that run currencies
LONDON: The planned virtual Facebook unit Libra, already under heavy attack by US president Donald Trump and global regulators, faces skepticism even in the larger cryptocurrency community.
A topic – in addition to Brexit – has dominated the discussion between the promoters and shakers of the financial technology of London or of the FinTech sector gathered for their annual meeting: the future of virtual currencies.
"Can I ask you to raise your hand if you don't want to use the Libra?" asked the moderator for an event at the recent "FinTech Week" in London.
In the room, full of about 100 experts and media that closely follow the sector, about two thirds of the participants raised their hands to express distrust of the new currency.
Helen Disney, founder and head of Unblocked Events, which promotes the blockchain technology that feeds many cryptocurrencies, has recognized growing doubts about who exactly would supervise and regulate Libra's operations.
– Power to the people –
People are "worried about how governance … it would work," Disney told AFP.
"The cryptocurrency community is a very libertarian thinker," it is "about empowering people, democratizing finance, preserving large banks and companies that control the economy," he said.
Last week's meeting arrived a month after Facebook announced its virtual currency plans to the world.
Libra, which is widely regarded as a challenger to the dominant global player Bitcoin, is expected to be launched in the first half of 2020.
While Bitcoin is decentralized, Libra will be co-managed by 100 partner companies, including the recently created financial services division Calibra of Facebook.
The companies behind Libra – which will be supported by a basket of real world currencies – include payment giants Visa, MasterCard and PayPal, as well as taxi-landing services Lyft and Uber.
To access Libra on smartphones, users will go through a virtual wallet that will also be called Calibra.
While Facebook has a huge customer base around the world that should facilitate the adoption of the Libra, the company has also been plagued by privacy concerns that could make users hesitate.
"I do not see the time when a cryptocurrency arrives with the ethics of Uber, the resistance to the censorship of Paypal and the centralization of Visa, all linked under the proven privacy of Facebook," said Sarah Jamie Lewis, manager of the non-profit research organization Open Privacy.
Meanwhile, Libra has raised eyebrows among the world's financial regulators, including the Bank of England, the European Central Bank and the US Federal Reserve.
But Disney believes that Libra will finally force regulators to present clear guidelines on regulation, as requested by the cryptocurrency community itself.
"We have waited a long time for a clearer signal (concerning the regulation of cryptocurrencies and digital resources", he said.
But James Bennett, head of the cryptocurrency research company Bitassist, argues that Libra should not be seen in the same light as Bitcoin.
"In the long run, people might realize that Libra is not a cryptocurrency," Bennett said at the FinTech Week event.
"A real cryptocurrency should be resistant to attacks from all sides, from sovereign states to multinationals," he said, adding that "cryptocurrency is a type of money used to transfer value on the Internet that cannot be stopped, confiscated or destroyed by any single entity ".
– "Based on thin air" –
Meanwhile Trump unleashed a vicious attack on virtual currencies, beating them for their supposedly obscure nature and claiming that Libra had neither reputation nor reliability, unlike the dollar.
"I'm not a fan of Bitcoins and other cryptocurrencies, which are not money, and whose value is highly volatile and based on nothing," Trump announced Thursday.
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