Libra, China’s Digital Currency might be ‘cause for cautious optimism’ for Crypto

Libra, China’s Digital Currency might be ‘cause for cautious optimism’ for Crypto

“It is the potential impact of these major international players on Bitcoin and other cryptoassets that most concerns the crypto community — specifically, whether these moves from Facebook and central banks will help or hinder institutional influx into crypto,” claimed Co-Founder and CEO of CryptoCompare, Charles Hayter, while addressing the social networking giant’s proposed crypto-project Libra and Chinese digital currency.

Bitcoin is a decentralised network that is permissionless where anyone can transact on the blockchain and a transaction, once made and paid for, cannot be stopped or altered.

Compare this to Mastercard stopping transactions to Wikileaks years back, or banks freezing accounts. You cannot do that on a proper blockchain, hence it defies censorship.

Libra, on the other hand, is being operated by large corporations in a similar fashion to Mastercard. However, this did not stop market commentators from speculating about any connection between the two different assets. And now that China’s digital currency is in the picture, these centralised assets affecting the cryptocurrency space continue to be a major bone of contention.

In Hayter’s post published on CityAM, the CryptoCompare CEO drew parallels between Bitcoin and Libra and China’s digital currency. The exec’s comments read,

“Despite the fundamental differences between Bitcoin and centralised digital assets such as Libra or China’s digital currency — in their governance, architecture and price volatility — there exists a strong link between the two classes of assets. On the most basic level, they share the moniker of ‘digital asset’ and are therefore inextricably linked in the minds of the public and the investors alike. Many crypto-natives believe that this connection should not be underestimated and will drive ultimately drive mass retail adoption of Bitcoin and ‘sound money’.”

Hayter also noted that the CME Group, who was the first to introduce Bitcoin futures — a type of investment product providing indirect access to the price of Bitcoin — back in 2017 saw the number of contracts open on Bitcoin hitting an all-time high, shortly after Facebook unveiled Libra in June 2019. As both these assets, Libra and China’s digital currency, plan to foray into the crypto-industry, this could potentially bring about transparency and efficiency in the marketplace, the exec acknowledged. While admitting that speculating the next phase for Bitcoin and cryptocurrencies, by extension, in the nascent industry is “notoriously risky,” Hayter wrote that “there may be cause for cautious optimism” about existing digital assets.

Published at Wed, 06 Nov 2019 10:29:34 +0000

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