That is, just as currencies in the past were backed by gold, Pounds will be backed by modern fiat currencies. These assets will be bank deposits and reputable government securities, based on a basket of fiat currencies, among which will be the euro and the dollarr. The way Facebook wants Libra to retain its value is by accumulating the so-called “Libra reserve”, meaning each Libra will be backed by quality assets. Even so, experts foresee that maintaining the stability of the currency is impossible in adverse scenarios (such as those experienced ten years ago at the international level, neither more nor less) and surely this means that Libra has a significant systemic risk. However, it is easier said than done and although it is not the first stablecoin that exists, the truth is that it is the one that will have the support of powerful companies behind it that tries to guarantee that volatility is minimal. And on the other hand he wants Libra be a stable currencyThat does not change in value like crazy as we are used to with Etherum and company and thus it can be a means of payment and not a simple refuge of value. On the one hand, it has created a new transaction verification mechanism that facilitates their processing, to circumvent the slowness of blockchains such as Bitcoin, centralizing the processing network in a few actors. However, Facebook has had to tread very fine to avoid two of the great drawbacks of traditional cryptocurrencies. At last a project with powerful actors behind and with a clear idea arises: Easily bring payment to the crypto world with a user experience similar to that of a modern bank. The announcement of the creation of the Libra project by Facebook is revolutionizing the dormant world of cryptocurrencies. Possible problems leading to sinking and free float.
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