Facebook’s proposed stablecoin Libra, has been the talk of the town for a while. Since the official announcement of the hotly-anticipated currency, the reaction that followed has been mixed at best. However, Jeremy Allaire, co-founder, and CEO of payments company Circle, has chosen to look on the sunny side. In a July 5 interview with Bloomberg, Allaire said that the Libra coin creates special needs that regulators would have to create room for.
Allaire pointed out that because Libra will run in a closed-loop permission scheme, a new approach to regulations may be inevitable. He said,
“There’s a really key difference between stablecoins that run on kind of closed-loop permission schemes — which is how Libra is being proposed today, at least in its initial incarnation — versus stablecoins that can run on the public internet.”
Being closed-loop means that only a permissioned set of people can ‘mine’ the coin (if we can say that about Libra), and join the ‘nodes’ or server system. This sharply differs from the public, open method that BTC, which is touted as Libra’s greatest rival, runs on.
On the Bitcoin network, anyone can use cryptographic keys; anyone can join the network as a node, and anyone can become a miner to service the network and get blocks. Allaire clarified that USDCoin (USDC), the stablecoin jointly released by Circle and U.S. cryptocurrency exchange Coinbase, runs on a public network.
Libra May Trigger Better Policies For Crypto
Apart from world governments’ cynical interest in the workings of Facebook’s currency and its effects on the financial climate, crypto analysts are also having a field day predicting what it could mean if Libra is allowed to thrive.
However, the keyword is ‘allowed’- Facebook, in the white paper that was earlier released, declared noble aims for the digital currency. It may all seem very sunny and promising – but subsequent appraisals of the coin show Facebook and its cronies have their work cut out for them. Crypto bulls, on the one hand, are certain that Facebook’s endgame could be beneficial for Bitcoin. The idea is that Facebook won’t teach its users about Libra without piquing their interest in Bitcoin—the world’s most popular cryptocurrency.
Allaire’s stated that he hopes Libra will trigger better developmental policies for the general crypto world. Scrutiny of the Libra framework may end up working for good, as this would definitely help to identify, streamline and narrow down the possible issues that could arise, and craft regulations accordingly.
Allaire had formerly stated that the prevailing definition of cryptocurrency is too broad, and that’s the reason why regulators are having a hard time hitting the spot on defining laws that actually work.
Maybe Libra Is A Blessing in Disguise
Tax laws and policies have antagonized cryptocurrencies for years, basing their prohibitions on the fact that cryptocurrencies are too broadly -defined and too wide in scope to have a uniform, befitting policy. Well, with Libra under the magnifying glass of regulations, the crypto community can only hope that it means better days ahead for crypto regulations.