The major flaw in Facebook’s planned cryptocurrency, Libra, is that it’s a closed system — akin to a “walled garden.”
That’s the argument made by Marcus Treacher, Ripple’s senior vice president of customer success, in a CNBC interview published on Sept. 27.
“Walled garden” strategies and the antitrust pushback
The “walled garden” metaphor has notably been used in the past to refer to commercial strategies pursued by tech giants such as Apple, who endeavor to retain complete control over the software, apps and accessories related to their proprietary devices.
This very strategy has come under fire during recent attempts to take down these ostensibly monopolistic practices by anti-trust campaigners and lawmakers. The implications for the likes of Amazon, Apple and Facebook — even ahead of its Libra project — are expected to come into sharper view with the conclusion of a major United States antitrust probe now underway.
In leveling his critique against Libra, Treacher claimed that the Ripple network, by contrast, “has no parameter. It connects with all of the players that want to use the technology.”
He nonetheless weighed that it was still a “really good thing” that a Silicon Valley behemoth like Facebook had envisioned for itself a role in the digital asset space.
Libra not intended to replace currencies, says association head
As Treacher acknowledged, global regulators are, arguably, yet more concerned about the potential threat to national fiat currencies that Libra represents — an anxiety that the Libra Association’s managing director, Bertrand Perez, today attempted to quell.
Speaking today at a blockchain conference hosted at United Nation headquarters in Geneva, he is reported to have stated that:
“We are not in the area of implementing any monetary policy with the [Libra] Reserve.”
Perez further claimed that the cryptocurrency project could help with the fulfillment of multiple
U.N. sustainable development goals, such as eliminating poverty and reaching gender equality.
The conference reportedly included speakers from the Swiss National Bank and International Monetary Fund, among others.
David Marcus, the head of Calibra at Facebook, has likewise recently argued against any prospective threat to sovereign monetary policy from Libra, noting that:
“Each Libra is deposited one-to-one with traditional currencies and no new money is created. There is no impact on interest and yields. In this sense, the Libra reserve cannot disturb monetary policy.”
