The phrase ‘Bitcoin killer’ is thrown around with reckless abandon in the cryptocurrency space as new ICOs and projects attempting to garner the same fame and success as the major cryptocurrency. However, to date, there has not been anything that has really come close. Although, when Facebook announced Libra, there were concerns.
Facebook had planned to launch its own stablecoin cryptocurrency that would form part of a payment network that has the potential to reach nearly a third of the global population through Whatsapp, Facebook and Instagram. The notion of this cryptocurrency with huge instant adoption certainly sounded threatening to Bitcoin.
However, as things have played out, it seems that Facebook’s plans were a little too ambitious as the project has been hit hard by regulators who have almost stopped it coming into being. Libra is still on the go, but its original launch date of Summer this year may well have fallen away.
But, does Libra, in whatever form it is eventually launched in, pose a threat to Bitocin still? Economist and academic John Vaz believes that it does because Libra is purpose-built while Bitcoin has scaling and designation issues.
Libra’s not dead
According to Vaz, Libra is not dead, the project is still having to navigate the regulator nightmare it is faced with. And, if Libra does succeed, its success over Bitcoin will come in its ability to scale and reach billions instantly, as well as its purpose being for payments rather than a vehicle for speculation.
Libra, as a concept, is a very sound one, the issue is the mistrust of Facebook and its entry into the financial space. However, with its strong user base, it could well rocket to the top of the payment’s network tree.
“They are targeting a market which is ready-made for them in the sense that people are already making transactions on Facebook, and Messenger, and WhatsApp, and Instagram — they own the lot. So they’ve got the message traffic, and those people are doing economic transactions already using fiat,” Vaz told Cointelegraph.
No love for CBDCs
Another example of a potential alternative to both Libra and Bitcoin is the emergence of Central Bank Digital Currencies which will be able to leapfrog regulatory concerns having been made by the regulators. However, for Vaz, these coins are not nearly important or special.
“They will be a kind of rearguard action being fought by the central banks because they don’t like cryptocurrency,” he added.
Rather than central banks posing a threat to Bitcoin, Vaz believes that Bitcoin and other cryptocurrencies threaten to undermine banks’ control over the money supply.
He said: “It takes away their ability to pull a lever in the economy because under things like Bitcoin, you can’t create money by the way of credit. Banks can lend that money up to maybe eight or nine times on a fractional reserve system. So a lot of banks create massive money supply on the fractional reserve system. Under Bitcoin, you can’t lend what you don’t have.”