Libra is to be a stablecoin, with its value tied to a bundle of assets & fiat currencies (not “pegged” to a single one) in order to limit volatility. Only Libra assoc. members can “mint” & “burn” new Libra based on reserve assets. Less clear is what those assets will be. 3/
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But how does money get *into* the Libra ecosystem?
As any payments nerd can tell you, the on-ramps & off-ramps to the financial ecosystem are tightly controlled, and for good reason (money laundering, terrorism, etc)
So far, no mention of how to convert fiat to Libra. 4/6 replies 1 retweet 36 likesShow this thread -
The on-ramps & off-ramps are also where a lot of the fees get charged to the underbanked. If Libra wants to eliminate usurious fees, it’s going to have to find a way to control fees people pay to convert cash to Libra. (see intl money txfr fees as a *bad* example today) 5/
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Libra’s vision of creating a global financial system to empower billions & serve the underbanked will only be as good as their reach & ability to onboard people + money. This literally means tellers & kiosks to exchange physical cash. It also means a good user experience. 6/
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One thing Libra has going for it is backing from good developers & UX folks. As transformative as bitcoin has been, it has a user interface problem. It’s hard enough for “normals” to get a bank account. Forget about managing private keys or “cold storage”. 7/
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Lots more questions we don’t yet have answers to: - Dispute resolution? Returns? Chargebacks? - AML/KYC process (see “onboarding” question above) - Economics - do members have a way to make money? - Insight into transactions for members vs. privacy for users? 8/
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Overall, this is an exciting announcement for the global cryptocurrency ecosystem & one that could move the market given the backers involved. But it’s *far* from a sure thing & it will be interesting to see answers to the questions above over time. 9/
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All that said, it’s always much easier to criticize something than it is to build something, so kudos to the folks who have gotten Libra this far. I look forward to what’s coming. /10 fin
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Replying to @peter
Peter, wonderful insights sir. Indeed the cost on to this highway is something called Gas. Gas is paid by senders, recipients, sponsors or all the above. There will be banking partners, 9 announced soon that will on-board and perhaps Mint currency into Libra.
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Replying to @BrianRoemmele
Vey curious to learn more about the banking-to-Libra interface(s). I would guess that the major networks & payment partners could serve as a primary on-ramp (eg load from debit card). But AML/KYC still comes into play there, and that still falls to financial institutions.
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Peter, precisely. In many countries, France has already spoken, a bank will be required by law. I suspect this will happen in the US also. In many ways this is more a Money Order than it is Bitcoin. That said Libra is needed and of great utility for the next phase of the Internet
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