Senior vice president of customer success at Ripple, Marcus Treacher, recently spoke about Facebook (FB)’s cryptocurrency Libra in great detail. He said that the company is creating a closed ecosystem with its crypto offering.
The Facebook offering is flawed
According to Treacher, Facebook’s plan to launch Libra has to face a major challenge, i.e. creating a ‘walled garden’. Closed systems are the way of life in some tech companies like Apple where the companies maintain extensive control over software and applications running on their platform.
Treacher said that Ripple doesn’t work inside a walled garden like Libra. He said,
“Yes it’s a network, but it has no parameter. It connects with all of the players that want to use the technology.”
Note that Ripple’s XRP is the third-largest digital currency in the world and has been working with multiple banking and financial institutions to create payments and remittance corridors around the world.
Facebook, on the other hand, is developing a cryptocurrency for its own ecosystem, which will be overseen by Libra Association, a Switzerland-based non-profit. The company is partnering with other prominent organizations like Uber, PayPal, Visa, and MasterCard to contribute to this project and become Libra Association members. Facebook will launch a new digital wallet called Calibra alongside a digital vault called Libra Reserve where it will hold dollars and other currencies backing its coin.
Is Facebook Libra a good thing?
Though Treacher has issues with the Facebook walled garden, he said that it is a “really good thing” that a major tech company is dedicating its resources to digital currencies. However, regulators aren’t too amused with the offering. US lawmakers and regulators from around the globe have criticized the company’s plans to launch a cryptocurrency fearing that it would create a parallel financial system. France has even pledged to ban Libra within its bounds and is planning to launch a state-backed digital currency of its own.
Ripple, on the other hand, is under trouble too. The company’s token is often classified as a security by some experts, and the company has faced allegations related to price manipulation of XRP. Some users have also accused them of dumping XRP in the market and lowering its prices artificially, which has hurt their portfolios. XRP is the lowest price cryptocurrency in the top 5 list and Ripple is one of the most highly-valued private companies in the world today.