A US lawmaker is drawing a line between true cryptocurrencies and Facebook’s digital asset Libra.
At a hearing on the future of Libra on Wednesday, lawmakers grilled the company’s CEO Mark Zuckerberg.
Republican Rep. Ted Budd of North Carolina used his time to separate Libra from crypto assets, warning that Washington should work to avoid stifling innovation in the blockchain technology.
“It’s crucial that members of this committee be able to differentiate between Libra, which is really not a cryptocurrency, and actual cryptocurrencies like Bitcoin, Ethereum and XRP, before we discuss draft legislation.
Many of the proposals would stifle financial innovation and if we’re to remain as a world leader in financial technology, it’s vital that this committee not embrace reactionary laws against cryptocurrencies.”
Although Bitcoin, Ethereum, XRP and Libra are all built on open-source code, the Libra ledger is corporatized and does not allow anyone in the world to run a node and power the network.
Instead, a group of hand-selected companies will power the Libra network, increasing the digital asset’s centralization and potential for censorship.
At a separate hearing on Libra back in July, CoinShares chief strategy officer Meltem Demirors compared and contrasted Libra with BTC to highlight some of the major differences.
“Imitation is the most sincere form of flattery, but it is important to distinguish that Libra is not a cryptocurrency. There is a clear line separating Libra, Facebook’s self-styled ‘cryptocurrency’ from Bitcoin and other cryptocurrencies…
Bitcoin is decentralized, which is an esoteric metric, but in practice, it means no one entity or group of individuals has the ability to block or reverse transactions.