In order to understand more about Libra and its potential, I sat down with Andrés González Andújar, who leads our blockchain lab here at Belatrix, to get his thoughts on the cryptocurrency. Here is what he had to say:
“I’ve been reading a lot about Libra in the past few days – getting feedback and impressions on it from some cryptocurrency enthusiasts groups, mostly here in Argentina.One of the major concerns voiced by the community is the fact that Libra is being marketed as a distributed cryptocurrency, but is managed by a consortium. It’s still uncertain how it will be managed and how much leeway the community will have over it.
Regardless, it looks very promising. In regions where money movements face restrictions by very strict regulatory policies and high taxes, this offers both potentially a breath of fresh air for consumers and companies, while of course also raising some concerns. The community is aware of this, and obviously the companies holding Libra are too.
What will be interesting to observe is how it interacts with services such as Uber. Uber is not operating legally in many countries, or it is outside of regulatory frameworks, and because of this, in these countries their services cannot be charged to users’ credit cards. Libra will provide a perfect alternative for people, so they won’t have to carry cash to pay for their transportation. The participation of Mercado Pago, a leading fintech here in Argentina, is a clear example of that.
I think that this is a key aspect of the success or failure of these kinds of technologies… As soon as people feel that it will make their lives a little easier, they start to use them and welcome the technology with open arms.”
As a personal note, because I have moved around quite a bit (from Argentina to the US and recently to Spain) I have experienced the challenges of having to manage multiple bank accounts and credit cards in multiple currencies. This also means bearing the excessive bank wire charges when I need to move funds internationally, as well as the very poor exchange rates all banks offer.
As a result, I am very intrigued by the idea of keeping some of my savings in a crypto-currency that is pegged to multiple currencies and that allows charging against it or transferring it, with much less friction than bank accounts and credit cards currently allow.
What are your thoughts about Libra? As always, I look forward to reading your comments.