IMF is bullish on XRP but bearish on Facebook’s Libra coin

Facebook Libra vs Ripple XRP:

The IMF is bullish on XRP but bearish on Facebook’s Libra coin. Despite this the Bitcoin Maximalists have been spreading their fake news and FUD propaganda against XRP once again, this time resorting to calling Facebook’s Libra coin “an XRP killer”. Pathetic. How low are they going to sink next?

Bitcoin was supposed to change the world, Bitcoin anarchists wanted to kill off banks and kill off Facebook yet here their messiahs are preaching that JP Morgan before and now Facebook – are going to destroy XRP, all the while building up the possibilities that these same evil banks and global companies like Facebook are going to save their precious BTC.

It really is quite sad that they have to resort to such pathetic fake news in order to slowly bleed out their holdings by selling to the gullible and ignorant. Bitcoin died in 2017, get over it and grow up already.

But rather than focusing on all the lies, let’s instead take a look at what Christine Lagarde has been saying (Lagarde is since 2011 the Managing Director and Chairman of the International Monetary Fund and one of THE most important people on the planet).

IMF is bullish on XRP but bearish on Facebook’s Libra coin

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Christine Lagarde XRP

Lagarde on distributed ledger technology:

“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system… We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”

It is well known that Christine Lagarde and the IMF are big fans of Ripple and XRP, and a number of Ripple top brass have been working very closely with the IMF for a long time:

“International payments using cryptocurrencies can be securely received in minutes and can be rapidly settled in the domestic currency. DLT systems such as Ripple can be used to efficiently process foreign payments and can be supported by international banks and payment companies,”

IMF report on Fintech in Sub-Saharan African countries. 

Speaking this week at the G20 in Japan, Lagarde went on to criticize companies like Facebook:

“a significant disruption to the financial landscape is likely to come from the big tech firms, who will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence, which could lead to vulnerabilities in the financial system”

“Over the last five years, technology growth in China has been extremely successful and allowed millions of new entrants to benefit from access to financial products and the creation of high-quality jobs,” Lagarde said. “But it has also led to two firms controlling more than 90% of the mobile payments market.”

It is highly unlikely that Facebook will be allowed a free reign on their cryptocurrency as their influence and their massive user bases on Facebook, Instagram and particularly Whatsapp could see the Libra GlobalCoin being used on these networks for money laundering and illicit transactions (Whatsapp is already a hotbed for conducting drug deals and I can see it already happening: “Can you bring over 5 grams of charlie please mate, here’s 250 Libra”).

The argument that Libra could compete against XRP in the global remittance marketplace is also a very naive joke. Without multiple banking licenses and without being regulated across the globe (something Ripple has already spent more than half a decade building up and working on) Facebook will go bankrupt fighting court cases.

As the great Kevin ‘Mr Wonderful’ O’Leary would say “The big banks will crush Zuckerberg like the cockroach he is”.

Educate yourselves, do your own research and don’t believe what 99% of you read on crypto “news” websites. Don’t even trust our very own “Wise Words” blogs as we spend a lot of time trying to fight the fake news in Bitcoin owned and sponsored publications and our own opinions of course creep in. We don’t have all the answers which is why we keep our blogs completely separate from the cryptocurrency news section where we only quote directly from the horses mouth.

Official Twitter channels to follow for the IMF and for Ripple

IMF News

IMF LIVE

Christine Lagarde – Managing Director and Chairman of the IMF

Gerry Rice – IMF Spokesperson

Ripple

Brad Garlinghouse – CEO of Ripple

David Schwartz – CTO at Ripple and the most intelligent person in Crypto

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Ripple VS Facebook Libra: Could Libra be Mimicking Ripple’s XRP

Facebook is yet to launch Libra after it was announced on June 18, 2019. Since then, controversy seems to be looming around the launch, and now crypto experts believe that Libra could be mimicking Ripple’s XRP.

Facebook has already released Libra’s Whitepaper, a move widely considered as bad news for Ripple, XRP. The fact that the Libra Association consists of a consortium of large well-known tech companies, including PayPal, Uber, and Spotify, among others, coupled with the backing of Facebook, Libra is projected to give Ripple high competition once in operation.

Nonetheless, is Libra really a cryptocurrency? Is the project mimicking Ripple? Will its operation be credible? This post will look at the differences and similarities between the two projects.

(See Facebook Libra vs Ripple XRP part 1)

What is Facebook Coin Libra?

Announced in 2019, Libra is Facebook’s flagship cryptocurrency that will facilitate cross-border money transfers as well as payments. Once launched, users will exchange their fiat currency, including USD and EUR, for the Libra token on Facebook’s platform. Libra will also be used as a means of payment or transaction on Facebook’s owned companies: WhatsApp and Instagram, as well as Facebook’s partners such as Uber, Spotify, and MasterCard.

According to the recently unveiled White Paper, Libra is “a new kind of digital currency built on the foundation of blockchain technology. The mission for Libra is a simple global currency and financial infrastructure that empowers millions of people”. Facebook claims that the project will empower billions of people across the globe, citing 1.7 billion adults without bank accounts who could use the currency to their advantage.

Facebook claims that Libra will be decentralized and governed by a separate entity-The Libra Networks LLC based in Switzerland. Just like Ethereum, Libra will run on the Proof of Stake (POS) protocol.

To avert centralization fears and concerns from the recent privacy issues, Facebook has completely distanced itself from the project by forming a subsidiary named Libra Networks LLC. In the second quarter of 2020, Libra is set to be incorporated into the Facebook ecosystem encompassing WhatsApp, Messenger, and Facebook.com using the Calibra wallet interface.

Facebook Libra’s Regulatory Headache

With Libra yet to be launched, Facebook has been embroiled in a data scandal which compromised on privacy of users. The scandal paints a bad picture of the company and also casts doubts on the extensive adoption of the Libra project once its launched. It’s highly unlikely that Facebook will be allowed a free reign on their cryptocurrency as their influence as well as their massive user bases on Facebook, Instagram, and WhatsApp could see the Libra GlobalCoin abused through money laundering and illicit transactions. Already, several Facebook officials have been grilled with regards to the launch of Libra.

Libra has also faced a regulatory backlash from the US and around the world. The president of the Deutsche Bundesbank and ECB official, Jens Weidmann, said that the European Union could need an alternative to Libra. In an interview, Weidmann said that he believes that projects like Libra should not be created. The European Union has also warned that cryptocurrencies such as Libra pose a risk to the global financial system. The US, France, and India are among the countries that have vowed to block Facebook’s Libra from operating in their space. Swiss finance minister Ueli Maurer said on Dec. 27 in Bern that the country can’t approve Libra in its current form. He stated that Libra “has failed” in its current form because the basket of currencies proposed by Libra hasn’t been accepted by the issuing national banks.

The US Securities & Exchange Commission(SEC) has also expressed similar sentiments regarding Libra’s sovereignty. SEC is concerned with Facebook’s allegations of misuse of data as well as the potential of Libra to be used to finance criminal activities. SEC also states that Libra could rival the US dollar as it’s based on a relatively new and unproven technology. In essence, there are so many regulatory hurdles that could delay or completely stop Libra’s launch. And with Libra already facing a bleak feature, several companies have the Libra Association. Visa and MasterCard pulled out of the Libra project in October 2019, citing regulatory uncertainty. PayPal and eBay have also pulled out from the project. Vodafone Group has become the latest company to exit the Libra Association to focus its efforts on M-pesa- a mobile payment platform.

Libra vs. Ripple’s XRP

Libra has largely been compared to Ripple with claims that the coin is mimicking Ripple’s XRP. For starters, Ripple is a decentralized network powered by the XRP token. Ripple Labs largely own XRP and aims to offer banks a platform to efficiently handle cross-border transactions quickly and cheaply.

It’s evident that Ripple and Libra share a common target group and thus are apparently in competition with each other. Nonetheless, there are differences and similarities between the two projects

• Purpose

Ripple’s XRP was created to serve large financial institutions such as banks to provide a platform for rapid transactions. Libra, on the other, has intended to become a means of payment for all retail customers regardless of size.

• Blockchain protocol

Libra employs Proof of Stake(POS) consensus mechanism. Contrary, Ripple has its own patented technology referred to as the Ripple Protocol consensus algorithm(RPCA).

• Libra is a “stable coin” pegged to the US dollar while Ripple XRP is an altcoin.

Other than differences, the two projects share similarities as well. In July 2019, Garlinghouse highlighted the differences between Ripple and Libra while speaking to CNBC’s Squawk Box. He said that Ripple’s approach is centered on helping banks move money across borders, while Facebook’s Libra Association has zero banks on board.

• Both Ripple and Facebook have distanced themselves from their crypto projects.
• Both projects are environmentally friendly
• Both have formed partnerships with established brands.

Why Libra is not a Cryptocurrency

Why is Facebook launching Libra? The company obviously wants to ride on the cryptocurrency wave to create a global currency and benefit immensely. Several factors indicate Facebook’s Libra is not a cryptocurrency but a Fiat. It would be challenging to trust Libra, not after Facebook’s data scandal. Facebook may decide to track what you buy and sell your data to advertising companies. Below are some reasons why Libra is not a cryptocurrency:

• It’s not fully decentralized – The fact that Facebook still has some power over Libra means that the token isn’t fully decentralized. This is totally against the primary idea in cryptocurrency which is decentralization or peer-to-peer cryptocurrency.
• It’s pegged on fiat currency- Libra is pigged in fiat currencies, including the USD, GBP, EUR, and JPY. It totally doesn’t make sense to create a cryptocurrency pegged to a fiat currency like the USD. Why not use the fiat currency by itself? After all, cryptocurrencies should not be a government-backed currency.
• Central authorities regulate it- Unlike Bitcoin or other cryptocurrencies such as Ripple’s XRP, Libra is largely regulated by central governments. The House Financial Services Committee chair. Rep. Maxine Water has asked Facebook to halt the development of Libra cryptocurrency until hearings are held.

Bottomline: Ripple has a Brighter Feature Compared to Libra

With immense regulatory hurdles before its launch, Libra’s feature could be in jeopardy. This could be Ripple’s opportunity to reinforce its platform and realize a brighter future. Ripple is a plausible, quick, and low-cost solution to governments and established financial payment looking for cross-border transactions.

Ripple has already formed over 300 partnerships worldwide and has demonstrated its capabilities. Some of Ripple’s partners include Santander Bank and Shinhan Bank based in South Korea. The fact that Ripple’s payment solutions are fast, cost-effective, secure with the ability to transfer large sums of money across borders makes it superior to Libra, which is yet to be launched. Facebook’s new project, Libra, is not a cryptocurrency but a scheme to reinforce the company’s control over our data and increase their profit margin.

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Vodafone is The Latest Corporation to Abandon Facebook’s Libra Project

On January 21, 2020, British telecommunications conglomerate Vodafone became the eighth company to withdraw from the Libra Association. Vodafone and Libra confirmed in a press release that the company is no longer part of the consortium.

According to reports, Vodafone will now dedicate resources previously reserved for Libra to its well-established digital payment service M-Pesa, which the corporation plans to expand beyond the 6 African countries currently served.

The split seems to be amicable, with Vodafone leaving explicitly to cater to its financial inclusion ambitions rather than for regulatory fears that have scared off other former members of the Libra Association.

With this move, Vodafone joins Paypal, Mastercard, Visa, Mercado Pago, eBay, Stripe, and Booking Holdings in withdrawing from the controversial cryptocurrency project.

Vodafone has long managed its own digital currency in Africa thanks to M-Pesa, a transfer service based on a mobile platform.

Libra Association Soldiers On With Its Cryptocurrency

Despite losing numerous partners over the past few months, mainly due to regulatory hurdles, the Libra Project looks well on its way to seeing a 2020 launch.

The Libra association has already launched a testnet for its digital currency, with new features added in the past few months. Additionally, Libra intends to admit new members to its Association in 2020, with sources close to the project placing the waitlist at about 1500 interested corporations.

Vodafone itself has not ruled out the possibility of backing the Libra cryptocurrency, with its spokesman telling news reporters that the company continues to monitor the development of the Libra Association and doesn’t rule out the possibility of future cooperation.

Just last week, Libra announced the formation of a technical steering committee to oversee the development of its digital coin, with the head of policy and communications for the Libra Association. Dante Disparte reiterated that they would continue in efforts to achieve a safe, transparent, and user-friendly implementation of the Libra payment system.

Regulatory Concerns Haven’t Dampened Libra’s Resolve

While Libra was initially envisioned to launch in the first half of this year, that timeline has been questioned after Facebook CEO Mark Zuckerberg said that regulatory concerns could push back the date.

That said, Libra’s resolve to build a financial ecosystem that can connect and empower billions of people seems unchanged.

Disparte stated that although the membership of the Association may change over time, Libra’s concept of governance and technology ensures that the payment system will remain resilient.

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Google Set to Enter the Banking Sector Creating Competition for Facebook’s Libra

Google plans to partner with financial institutions such as Citigroup while collaborating with banks and credit unions to offer checking accounts. 

Google is set to offer checking accounts as from next year under their project Cache. The checking accounts will be in the financial institutions’ names, and not Google, unlike other tech companies, has handled their financial products. This is a rather bold move for the tech company to offer its consumers banking options.

This move is highly similar to the previous attempts by Facebook and Apple to join the banking space, which were countered by various obstacles.

Big Tech Companies Woes in the Banking Sector

Unfortunately, it is reported that most people are still skeptical about trusting these big tech companies as they are highly doubtful that their personal information would be kept safe. As a matter of fact, just like with Libra, Facebook’s stable coin, ever since it was announced to be launched, debate after debate has ensued, mostly targeting Facebook’s ability to keep consumer’s personal information secure and regulatory issues. Thus this far, Facebook has since announced a new system of payments in its social media and messaging platforms.

In the same note, earlier this year, Apple, in partnership with Goldman Sachs, launched a credit card for its iPhone users. However, multiple issues have come up since then. Apparently, Apple claimed to have created the card without a bank, which has made their relationship with Goldman quite tense. Moreover, the algorithm that the card was set to determine the customer’s credit limit is also said to be biased towards men.

Google Says It’s All in Good Faith

On the bright side, Caesar Sengupta, the executive at Google, stated that they are not after selling customers’ personal information. Instead, he noted that Google is after assisting people to do more in a digital way, which will be good for both the internet and for the people.

a Google spokesman Stated:

“We’re exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account.”

However, Caesar did point out that the challenge will be convincing the public to give them access to their personal details, which is a sensitive part of their lives, something Facebook is battling with.

Wise Words

For a long time, banks have had fears of small tech startups bringing in competition. However, it just turns out that the large tech companies seem to be the bigger threat. These big tech companies, the likes of Google and Amazon, not to mention Facebook, have established relationships with millions of consumers who may act as their base in joining the banking space.

Senator Mark Warner expressed his concern in the engagement of these large tech companies in the banking field. His main concern is the fact that there is no set of regulatory rules. He echoed that once these tech companies are allowed into the field, removing them will be practically impossible.

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Donald Trump, the United States Treasury, Ripple, XRP, Bitcoin and Facebooks Libra

This week has seen a big step up in government and international bodies talking about crypto. From warnings against Facebooks Libra coin to bashing Bitcoin and endorsing the blockchain technology and cryptocurrencies which actually have actual use cases and real potential.

Here we are going to highlight the 3 main talking points from the past few days, Donald Trump and his tactical Twitter tirade against Bircoin and Libra, Steven Mnuchins (Secretary of the Treasury) speach on crypto and Ripple CEO Brad Garlinghouses response to both of these.

Regulation is coming, make no mistake about that. Do we need to pick a side?

• The XRP side with the best product, the real world utility and multiple use cases, the big partners and working tirelessly and relentlessly to try and help all regulatable cryptos become accepted by governments and regulators worldwide?
• Do we side with the anarchist and libertarian ideologies and hope that governments won’t be able to crush anybody not complying with the rules?
• Or do we choose to put our heads in the sand and assume that the Tether scandal will continue forever and that they can keep on pumping Bitcoin with fake stablecoins, an army of bots and money laundering tactics?

I think by now you know which side of the fence I am on (Disclaimer: I do hold some XRP but do not hold any Bitcoin)! But enough about my thoughts, let’s see what the experts have been saying…

Let’s start at the beginning then,

United States President Donald J. Trump denounces Bitcoin and Libra:

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….

….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…

…and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar! – Donald J. Trump

U.S. Treasury secretary Steven Mnuchin slams Bitcoin and Libra:

As the president has said, Bitcoin is highly volatile and based on thin air…

We are concerned about the speculative nature of Bitcoin and will make sure that the U.S. financial system is protected from fraud…

This is indeed a national security issue… Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.

With regard to Facebook’s Libra, our overriding goal is to maintain the integrity of our financial system and protect it from abuse… could be misused by money launderers and terrorist financiers… – Steven Mnuchin

Ripple CEO Brad Garlinghouse backing regulation, XRP positioned for success:

Just watched @stevenmnuchin1’s press conference on regulating crypto and have personally spoken to him on this topic. I’ve also been ruminating on @realdonaldtrump’s tweets on crypto last week.

I agree that crypto isn’t likely to replace fiat currencies – I have been very vocal that crypto isn’t likely to disrupt the US dollar and other G20 currencies in my lifetime.

But as Mnuchin indicated, the entire crypto industry should not be painted with one broad brush – it has come a long way since the days of Silk Road. For the industry to succeed, we need to work with regulators and within policies. Full stop.

When I read the Libra whitepaper – outlining a goal to create a new fiat currency – it was clear to me that the effort should be held to the same standard as other regulated financial institutions.

XRP is uniquely equipped to solve a multi trillion dollar problem by offering a dramatically faster and cheaper bridge for cross border payments. @Ripple already works with regulators, banks and financial institutions (like @MoneyGram) to implement this around the world.

I hope there is no “ignoring, laughing or fighting” as it relates to regulation of crypto. If we want to maximize progress forward, it’s about working with the existing financial system – not against it.

If not, we risk squashing innovation here in the US, and letting foreign interests take control of this new sector of our global economy. – Brad Garlinghouse

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