By CCN.com: Avowed Bitcoin critic Nouriel ‘Dr. Doom’ Roubini has found another target – Facebook’s upcoming cryptocurrency Libra, on the day of its announcement. According to the New York University economics professor, Libra is ‘blockchain in name only’.
Further, Roubini argued that Facebook’s cryptocurrency was only designed to grow the social media giant’s profits. Per Roubini, Libra is a ‘monopoly scam’ given that Facebook boasts of billions of users spread across the world.
And in a separate tweet, Dr. Doom also warned of Facebook’s ‘ridiculous chutzpah’ designs. Per Roubini, Facebook intends to use Libra to become the central bank of the world.
Prior to dubbing Libra a monopoly scam, Roubini had started his tirade against Facebook’s cryptocurrency warning of its risks. By virtue of the fact that Libra will be linked to a basket of currencies, Dr. Doom cautioned that it will carry a ‘significant currency risk’ for users based in countries with relatively stable currencies.
According to Roubini, potential users of Libra from the U.S. or the EU might be turned off by a cryptocurrency that’s also linked to relatively unstable currencies from emerging markets for instance.
Roubini also predicted that Libra will generate massive revenues for the social media giant. Specifically, Roubini claimed Facebook will earn interest on user balances by investing them in treasury bills. But in Roubini’s opinion users that they should not expect to earn any interest on their balances:
Facebook Coin will make a fortune for FB & its investors by earning interest on “float”, ie users’ balances (as funds invested in safe interest-bearing gov bills) while pay 0% on such users’ balances. Rip-off! I rather keep my money in $ fiat & earn 2.5% on safe overnight rates!
Even though Dr. Doom has earned more than his fair share of enemies in the crypto community with his constant bashing of Bitcoin, some were quick to agree with him for once. This is for instance with his warning of the dangers of a centralized cryptocurrency.
Dr. Doom’s criticism of Libra comes ahead of the cryptocurrency’s launch. Already, Facebook has unveiled its wallet for Libra, dubbed ‘Calibra’.
The social media giant has also published Libra’s White Paper. This is located on a different website – libra.org.
Per the white paper, the mission of the cryptocurrency is to ‘’enable a simple global currency and financial infrastructure that empowers billions of people.’
As previously reported, Facebook’s cryptocurrency will be available to users of its other apps such as WhatsApp and Messenger.
Initially, the cryptocurrency had been touted as being primarily aimed at the peer-to-peer payments market. Facebook has now made it clear it will be targeting businesses in future:
The first version of Calibra will support peer-to-peer payments and a few other ways to pay such as QR codes which small merchants can use to accept payments in Libra. Over time there will be many others including in-store payments, integrations into Point-of-Sale systems, and more.
Last modified: July 2, 2020 8:29 PM UTC