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Libra could encourage Crypto adoption say Binance

Written by  Apr 23, 2020

Crypto industry might really benefit from Facebook's Libra coins adoption, according to recent Binance Research.

In their analysis entitled "Will Libra Live Up To Its Initial Ambitions?", Binance Research shows a positive vision of Libra's long-term future, however, there are some 'ifs.' The analysis claims that if "it were to become widely used with products directly quoted in ≋LBR, we could expect new stablecoins, both fiat-backed and crypto-backed, replicating its peg on multiple permissionless networks like Ethereum." Although, they decided against the move to a permissionless system themselves.

Binance Research sees the possibility of multiple crypto exchanges adding support for Libra Coins (LibraUSD, LibraEUR), but only after the networks' maturation and wider adoption. If these were to happen, Libra could become an alternative to existing stablecoins, and really shake up their competition. Nonetheless, this would prove hugely beneficial for the rest of the crypto industry, as the adoption would increase. If it happens that Libra opens access to third parties and keeps a user-friendly interface, "benefits to financial inclusion could be significant, and ultimately reshape the global payment industry," argue the researchers.

Facebooks Calibra
Also see: Facebook’s Calibra Aims to Create 50 New Jobs in Dublin for the Libra Project

That said, these Libra Coins would compete with existing crypto projects on non-trading use cases such as remittances, programmable currency, and other applications. But, its adoption would be prevented in the emerging sectors, e.g. decentralised finance, by the lack of inclusion and the permissioned component of the Libra network. "Subsequently, Libra Coins and stablecoins are unlikely to be direct competitors," state Binance's research team, because Libra didn't "compromise on its long-term goal of financial inclusion,“ instead making "short-term trade-offs that will starkly decrease its initial impact, as open access to Libra (via "Unhosted Wallets") has been postponed due to regulatory concerns."

Additional regulations for all levels of Libra and all it comes into contact with will most likely be imposed, both internally and externally, and the payment system will probably have to comply with stricter criteria created by the Bank for International Settlements. But there are restrictions, the analysis states, "there are very few payment systems, and most of them are operated by a central bank and of only regional scope." Therefore, "Libra’s envisioned global payment system could do to the payment industry what SpaceX did to the space industry: shake the foundations of a well-established sector with high entry barriers." Just the advantage of issuing widely-available programmable money, it says, would alone "initiate manifold efficiency gains."

Also see: How can you spend Cryptocurrency?

Libra Coin is now aiming to start from single-currency stablecoins, such as LibraUSD, LibraEUR, etc.

If you want to know more about Binance you can read our in-depth article here.

If you are new to the Cryptocurrency world and would like to open an account we recommend Cex.io.

Do you find this article useful? Comment below or follow us on Facebook or Twitter.

Carl Brough

Carl comes from a Crypto tech background in Blockchain, his flair and attention to detail is very important to the success of this website. Carl is a freelance journalist who now prefers to work from home and has such a broad range of experience in the alt coin market, we always appreciate his knowledge and ideas.

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