Some analysts at the investment bank Canaccord Genuity believe that the new Facebook’s Libra might benefit the world, of course, if the regulators permit it.
Libra Network will benefit the blockchain space
In one note to clients on Wednesday, the analyst named Michael Graham wrote that the Libra Network of Facebook, which was unveiled on Tuesday, is seemingly going to benefit the blockchain space, the bottom line of Facebook, and unbanked individuals as well.
But, he also highlighted that the project is first supposed to receive a seal of approval, or at least no resistance, from the national governments around the world.
Regulatory headwinds could actually be hurricane force, on one level, governments are supposed to appreciate Libra for the boost it might bring to the global commerce. On another level, Facebook’s Libra is the most credible cryptocurrency threat still to the currencies sponsored by the government.
Indeed, the lawmakers, as well as regulators already push back against the project. In the United States, the representatives Patrick McHenry and Maxine Waters, the ranking and chair member of the House Financial Services Committee, called for a hearing with the executives of Facebook, in order to discuss Libra, with Waters going as far as to ask the social media giant to cease development, at least temporarily.
Facebook’s Libra should be carefully examined, analysts say
Elsewhere, the German member of the EU Parliament, named Markus Ferber, said that the social media giant has to be permitted to operate in a regulatory nirvana, while the Finance Minister of France, named Bruno Le Maire said that Libra crypto can’t become a sovereign currency.
The governor of the Bank of England, named Mark Carney, also weighed in, saying that he actually held an open mind, but that the Libra crypto is supposed to be scrutinized too.
Putting the regulatory hurdles aside, Graham seemed to be bullish about the Libra crypto and the impact it will have around the world. He wrote that they see Facebook’s Libra as socially conscientious leverage of the global count of the company, to bring financial inclusion to billions of citizens on Earth for the first time.
About the implication of Libra for the blockchain space, Graham noted that the purpose of Facebook is to just hold 1/100 of the votes for the Libra Association, the governing council which is going to make decisions about the protocol. In his view, this is the appropriate level of centralization.
Will Facebook’s Libra crypto validate the blockchain payments model?
In fact, more significantly, if the Libra crypto is successful, it might definitely validate the blockchain payments model. He also went so far as to suggest it may definitely become the most valuable crypto.
He wrote that, if Libra fulfills its own ambitions, it could probably displace Bitcoin, as well as other existing digital assets which are principally used as a payments vehicle or as a store of value too.
Moreover, this note touched on secondary benefits that the launch partners of Facebook are going to see, probably. Merchants who use the Libra crypto may see some lower fees, and also an increased number of customers, according to him, and he specifically mentioned Uber, PayPal, Lyft, eBay, and Spotify.
Moreover, companies such as PayPal are also going to face problems if the Libra model is successful.
Graham has returned to the potential number of users in his closing summary, and he wrote that billions of possible Facebook’s Libra adopters may be targeted in minutes if the unbanked individuals suddenly gain access to the financial services. He actually said that the scale of reach is unprecedented.