Facebook’s Project Libra Gets Demolished By BitMEX’s Op-Ed By CEO Arthur Hayes
- Facebook’s Libra seems to be an ETF rather than a digital currency
- Arthur Hayes seems to be bullish about the effect this can have on Bitcoin
Facebook has recently released a new project called Libra that aims at helping users transact funds between borders, make payments and purchase things, including goods and services. However, there are many crypto enthusiasts that are not so excited about Facebook’s new project. One of them is Arthur Hayes, the CEO of the cryptocurrency exchange BitMex, that wrote a very hard op-ed regarding Facebook’s Libra project.
Arthur Hayes Demolishes Facebook’s Libra
The article that Mr. Hayes wrote is titled “Libra: Zuck Me Gently.” He starts by saying that Libra is not decentralized or censorship resistant, thus, it cannot be considered a stablecoin. This is a point that has been addressed in different occasions since the virtual currency will be controlled at all times in order to be compliant with regulations around the world.
In addition to it, Libra is going to be backed by different fiat currencies around the world, which would make of it a so-called stablecoin. Hayes explains that Libra is going to be destroying all stablecoins in the market.
Hayes went on explaining that the digital currency is going to be working in a similar way as central banks, which is going to be damaging the power that states and central authorities have over individuals around the world. And he believes that this is a good thing.
On the matter, Hayes wrote:
“The speed at which government officials rushed to admonish Libra tells you there is some potential positive value to human society embedded in the project.”
He considers that Libra is not a threat to financial privacy, which has been already gone in the past. The new digital currency and project is going to encourage people to understand that there is a new system that could work as an alternative. He also considers that this is positive for Bitcoin (BTC) because there are going to be several new users learning about the most popular digital asset that could eventually start using it.
Nevertheless, the article that Hayes wrote tries to show that Libra looks like a new investment tool rather than a cryptocurrency. The author of the article says that Libra works in a similar way as an exchange-traded fund (ETF), a recognized financial instrument that pays out interest from a basket of assets.
At the moment, the U.S. Securities and Exchange Commission (SEC) has not approved the first Bitcoin ETF in the market, and there were several proposals already presented in the market that none of them was approved.
In a recent article that was written by Dave Nadig, the managing director of ETF.com, explained that Libra is indeed an ETF rather than a digital currency. He explained that resellers will integrate with exchanges and other institutions that buy and sell cryptocurrencies to users, and will provide liquidity for users that want to convert from cash to Libra and back again.
The CEO of BitMEX said that the most significant disadvantage for Libra is that holders do not appear to be entitled to receive the investment income.
Currently, there are several countries around the world that are trying to understand how to better regulate Libra. The United Kingdom, the United States, France and Singapore are just some of the countries that are evaluating which is going to be the impact of the digital currency in their countries.