National Bank of Switzerland Officials say Libra’s documentation lacks important details and its vague
In our previous article Li Daokui was praising Facebook’s upcoming cryptocurrency Libra, while comparing it to Asian social networking titans such as AliPay and WeChat, citing that Libra will be similar to its Chinese counterparts but in many ways better.
More specifically, Daokui believes that Libra has the potential to become a global economic standard, fading the US Dollar’s domination even further.
Nevertheless, most policy-makers and financial regulators are left scratching their heads over Libra; especially when any relevant documents that should demonstrate how the digital currency is planning to operate, in which terms, and explain what is the real purpose behind its functionality, are unclear at best, as recently stated by the National Bank of Switzerland.
The vice-chairman of the Swiss central bank, Fritz Zurbruegg, reached the major contractors behind Libra’s development in order to seek clearance about the project. He came back with more questions than initially intended regarding Libra’s operations and said that the documentation backing the project is very vague.
Zurbruegg, surprised, said that it is hard to properly analyze the project at the moment, adding that the documentation lacked important details regarding Facebook’s digital currency, and some documents were even missing.
The Swiss prime banking institution invited representatives from the U.S. for further assistance with the “decoding” of Zuckerberg-style terminology, without any luck, as the representatives also agreed with the fact that the project is, indeed, looking “too vague” and it seems like every regulator who dips his hands into the Libra project ends up with more doubts about how it will actually work.
As Daokui previously said: Facebook, similar to AliPay, and WeChat, already has a network of billions of users worldwide, making a possible centralized digital currency, manipulated by the social giant, look like a threat in the best-case scenario for regulators all over the globe.
Unlike Bitcoin, Facebook’s Libra, while a cryptocurrency, would be functioning close to a US Dollar model, where the circulation, total supply, and price per unit are fixed and affected by the actions of the respective creator of the currency and not by a decentralized group of users.
That could lead to a totally new global economy, influenced by Facebook’s network, and not by the FED, or any other traditional monetary supervisors, making Libra, the epicenter of discussion in financial policy-making lobbies worldwide.
Switzerland is a relatively advanced country when it comes to financial innovation and macro-economy, and it’s not like they’re against the adoption of cryptocurrencies. Read our previous article about the latest guidance regarding blockchain technology, issued by the Swiss financial watchdog FINMA, and learn more about the country’s policy on cryptocurrencies.
Yet Facebook’s attempt for a global cryptocurrency bothers the capital of banking as many other governments worldwide.