Libra And Visa: All The Similarities And Differences

The entire hype surrounding the Libra cryptocurrency by Facebook all around the coming altcoin news has produced a lot of comparisons from people and analysts – who are probably expecting a lot from Facebook’s first-ever cryptocurrency. Today, we are listing all the similarities and differnces between Facebook’s stablecoin Libra and VISA – the global payments system. Since they are both payment systems in some terms, we are describing what they share and what they don’t.

First of all, we should note that Libra is not a cryptocurrency. It is a stablecoin that is expected to be pegged to the $1  price point. This is why it is seen as a distributed and decentralized community in the altcoin news. However, Libra is essentially a prepaid digital token which is backed one-to-one with the dollar and offering a transaction verification which is through a competitive process.

So, Libra and Visa do not share as much as many believe. Facebook is proposing (in Libra) a new form of organization – while VISA solves global problems through banking systems. When setting up Visa, it is important for its founder (Dee Hock) that the card would not be owned by self-interested shareholders. Instead, it was the users, banks and credit unions who “owned” Visa as a cooperative membership organization.

The similarities between Libra and Visa start with the big barriers to entry. The Libra Association is definitely a club with very high barriers to entry and an entity that needs to invest more than $10 million USD to have more than $1 billion in market value (among other criteria).

Libra’s white paper also outlines an organization that could become a decentralized and participatory system like Hock envisioned that Visa would become. However, Libra and Visa won’t be the same – if Libra is successful. If that happens, the stablecoin will likely become an undemocratic behemoth – like many best cryptocurrency news sites want to describe it.

At the end of the day, this is why governments have long been suspicious of private currencies. Libra is no exception to that rule – and we must not be distracted by its proposed technical complexity and instead, focus on how the technology is organized, prepared and how it knows that its rewards are distributed.