June 20, 2019, | AtoZ Markets - Since the Facebook Libra whitepaper release in June 2019, the crypto community cannot stop talking about the new stable coin and its impact on the current cryptos. What is the main difference between a Facebook coin and Bitcoin and should we expect Bitcoin vs Facebook Libra rally?
Bitcoin vs Facebook Libra - will Facebook coin overshadow the oldest crypto?
Part of the crypto community believes, that after GlobalCoin launch, Bitcoin will lose dominance in the crypto market due to Facebook Libra mainstream adoption which bitcoin strived to do for years. Others, however, think, that there will be no Bitcoin vs Facebook Libra battle.
The crypto enthusiasts considered the Facebook Libra Coin more like a blessing for all cryptos, including Bitcoin in the blockchain space.
Spence Bogart, Co-founder and Managing Partner of Blockchain Capital in one of his recent interviews, called Libra project -” one of the most positive external tailwinds in Bitcoin in its 10-year history.”
Bitcoin vs Facebook Libra: the main differences
There are certain differences between the social media giant’s stablecoin and the first cryptocurrency. The distinction of the aforementioned digital assets stems from their use case.
Spence Bogart of Blockchain Capital explains that Facebook Libra Coin is a medium-of-exchange where users can send money and house transactions.
Notable, that in its whitepaper, the social media giant, expressed its beliefs, that Libra as a global currency and a reliable financial infrastructure, might become a solution for unbanked regions.
According to the reports, the Facebook Libra Coin will be accepted on Whatsapp, Instagram, Spotify, and other apps. On the contrary, Bitcoin could be considered as more of an investment and store-of-value. For example, Michael Moro of Genesis Capital still calls bitcoin “digital gold.”
Other main difference between Facebook coin and bitcoin, is that Libra coin might have more chances in the mass adoption.
The Libra project received massive support from the top financial companies, including Mastercard, Uber, Booking Holdings, PayPal and Visa, which could impact massive Libra expansion.
Bitcoin, in its turn, as Michael Graham of Canaccord said, “was a grassroots experiment that is still in development.”
Graham added, that Bitcoin got more expensive and slower in conducting transactions. Canaccord analyst pointed on the fact, that Libra provides low-fee and fast transactions, while it still costs a lot to trade bitcoin.
Eventually, Bitcoin is a cryptocurrency, while Facebook Libra coin is a stablecoin. Bitcoin is not owned or governed by any central party, circulates on a decentralized network and thus is vulnerable to price swings.
According to the Facebook coin whitepaper, the stablecoin will be backed by a basket of real assets - bank deposits and short-term government securities.
Facebook Libra faces legislative obstacles
Despite all the positivity, surrounding the upcoming Facebook stablecoin launch, the US and EU lawmakers have expressed their concerns about the social media giant's project. A leading U.S. House lawmaker called on Facebook to halt their Libra cryptocurrency project and testify before Congress about their project's impact on data privacy and security.
Certain EU officials, however, including Bank of England Governor Mark Carney, expressed their “open mind” on the potential utility of the product while warning it could face strict regulation.
“Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation,” he added.
According to the latest reports, Facebook had been in communication with the U.S. However, it remains unclear whether Facebook GlobalCoin would directly fall under any existing U.S. or EU regulatory regimes.
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