The King Is Dead, Long Live The King - Comment

Author:Mr Adrian Daniels
Profession:Yigal Arnon & Co

It certainly looks like some significant institutional players have realized that the best way to deal with the revolution is to join it and shape it to their requirements.

Revolutions are a funny business: initial uprisings against the self-serving structures of old orders often become post-revolutionary regimes forming new self-serving structures betraying the ideals that fueled the original revolution. 'Twas ever thus. Are we living to see a digital version of this familiar cycle of history? Much has been made of Facebook's announcement of Project Libra – its intention to launch a new global peer-to-peer payment network in 2020. Some see Libra as the ultimate affirmation of the rumbling financial revolution which began around 2008 with the near-collapse of the global banking sector and the emergence of Bitcoin as the answer to the colossal breakdown in trust. Others see it as more evidence that the revolution has been co-opted by the failed financial establishment it was supposed to have superseded. So who is right? To listen to its executives, Facebook is being true to its mission statement. Zuckerberg's company is the ultimate vehicle for "connecting people," and Libra will serve the needs of the multitudes who until now have been unable or unwilling to open bank accounts. For instance, migrant workers around the world send billions of US dollars each year to their families using such services as Western Union, which often charge anywhere from 7%-10% of the amount sent (which includes $27 billion sent to Mexico from the US in 2106). If migrant users of Libra are able to instantaneously transmit their digital currencies through their Facebook or WhatsApp accounts for a fraction of the current cost, who can say that's a bad thing? Sure, Facebook and its backers will generate revenues for themselves, but are not all good revolutions about liberating the disenfranchised? According to the Facebook announcement, Libra will be managed by the Libra Association, an independent Swiss foundation, in the same way Ethereum is managed. And while Facebook will initially have a majority stake, the aim is for its voting power to be rapidly reduced to 1%. Additionally, while the Libra "nodes" (the entities which are needed to verify transactions using the currency) will initially be controlled by the founding members of the association, the aim is to transition to a decentralized permission-less system with thousands of unaffiliated nodes worldwide...

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