[Parker] The beginning of the great Libra. Will the end be great too?

“Through Libra, we will provide accessibility to the 1.7 billion people who belong to the marginalized population in finance,” a draft of a white paper on Facebook’s cryptocurrency project Libra reads. The white paper, which was first disclosed in June 2019, rattled the world. Even conventional media that do not often cover the cryptocurrency paid attention to the launch of Libra. #Libra midpoint check-in 1: while Libra slipped, ‘global payment dragons’ moved However, unfortunately, when Libra stumbled due to regulatory risk, global payment dragons started to move. The movement of companies that exited the Libra Association, including Mastercard, Visa and Paypal, has been fierce. Mastercard is consistently pushing forward with projects relevant to cryptocurrency cards in order to issue its own in the near future. Since last year, there has been an increasing number of cryptocurrency debit cards with ties to Mastercard. Meanwhile, Visa is hiring blockchain engineers by running a separate team for cryptocurrency. Paypal made an unexpected announcement that it will directly offer services for buying and selling cryptocurrency, adding that it will launch them this quarter at the earliest. These projects by global payment firms are already threatening Libra’s position. Facebook CEO Mark Zuckerberg mentioned China during his hearing, and it continues to be a threat as well. Dante Disparte, vice chairman of the Libra Association, has also said that even amid competition from other payment companies as well as Celo, a rival alliance, China still poses the main threat. Currently, China is preparing to form an alliance of the People’s Bank of China, Alipay and WeChat Pay to launch the Chinese CBDC, the DCEP. #Libra midpoint check-in 2: how far is Libra in its preparation for the regulatory risk? Far from what worries industry experts, Libra has not officially given up the service catering to financially marginalized people. In order to push ahead with this kind of service, uniform compliance systems between borders and regulations like the KYC (Know Your Customer) must be established. Establishing the cross-border compliance system is likely to be a difficult task. “The cross-border compliance includes the licensing of cryptocurrency projects and Virtual Asset Service Provider (VASP). In order to prepare for this, we changed our stance to continuing the permissioned governance,” said Disparte. Disparte considered knowledge of changes in the governance crucial in following the global regulations. Granted, one of the main goals of Libra is to be a leader in financing the marginalized, so streamlining compliance does not completely solve the issue. Libra’s goal can be fulfilled only when licensing is done in countries outside of the area where regulations are expected. Regarding this issue, Disparate said it is important to establish a system that will allow Libra to acquire KYC internally. #Why it is too early to say Libra’s end will be insignificant, despite everything As it was predicted, Libra’s strength has waned due to the risks from uncertainties of regulations. Libra has shrunk in a lot of areas, including the list of partnered companies and the content of the white paper. However, some say that it is too early to project a dim future for Libra. Libra presented a grand vision, prompting the government to be on guard, but as the project size diminished, they say that the risk of government regulation also lessened. Facebook’s invincible strength is its community -- the monthly user base for Facebook and its subsidiary Instagram surpasses 3.5 billion people. This is why Libra can grow into a massive project if it successfully negotiates with the regulatory officials. Whether Facebook, which is at the crossroads of a fall and a rebound, can once again claim its glory through Libra is something to watch for.

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