Binance Research: New Whitepaper Changes Libra’s Direction from Multi-Currency Stablecoin to Global Payment System
In a new report, Binance Research assessed the implications of the recent changes made on the Libra whitepaper.
Binance Research, the market research and analysis arm of Binance, released a new report, which studied the updates and changes made in the latest whitepaper of Libra, the frequently-discussed blockchain project spearheaded by Facebook, particularly its evolution from a network centered around one unique multi-currency stablecoin into a new global payment system and financial infrastructure.
In the recent “Will Libra Live Up To Its Initial Ambitions?” report, Binance Research noted that in its new whitepaper, which included changes in the mission statement and overall narrative, Libra is attempting to comply with applicable regulations. The whitepaper also provides a better description of the various parties in the Libra universe, as well as the set of currencies (multiple single-currency and a multi-currency pegged stablecoins). Amid these changes, the technological system behind Libra remained consistent with the original design from the technical papers from 2019.
“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,” according to the report. “If Libra manages to both open access to third parties and maintain a user-friendly interface, benefits to financial inclusion could be significant, and ultimately reshape the global payment industry.”
Binance Research previously wrote about Libra in the “First Look: Libra” report when the project was unveiled in June 2019. Since then, Libra had faced increased scrutiny from regulators and notable shifts in the composition of the consortium of companies that back it.
In its new report, Binance Research looked into the potential impact that Libra would have on monetary stability and the rise of stablecoins. While Binance Research saw Libra as a potential global payment game-changer, its recent report stated that Libra and its stablecoins would not compete with the use-cases of existing stablecoins.
Binance Research noted that Libra “did not compromise on its long-term goal of financial inclusion. Instead, the Libra team made short-term trade-offs that will starkly decrease its initial impact, as open access to Libra has been postponed due to regulatory concerns.”
The report also stated that Libra is unlikely to impact the monetary stability of developed countries, but could lead to currency substitution from the local currency to the multi-currency stablecoin “libra” whenever Libra’s stated collateral requirements would exclude a dedicated fiat currency.According to the latest whitepaper, Libra’s three core pillars are:
A distributed ledger (i.e., a blockchain) referred to as the Libra Blockchain.
A set of stablecoins (Libra Coins) which are backed by collateral held in the Libra Reserve. It consists of traditional assets: cash, cash equivalents, and short-term government debt securities.
A governance system by a Switzerland-based independent organization (Libra Association) and its subsidiary (Libra Networks) who develop and operate the network.