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What is the financial institutions’ answer to Libra?

What is the financial institutions’ answer 
to Libra?

Nicolas Kozakiewicz

Innovation Executive Advisor

Facebook has created its own cryptocurrency Libra; what are its differences with other crypto-currencies like Bitcoin or Etherium?

Because of its media strength, Facebook has propelled the subject of Stable Coins to the forefront and everyone’s mind. But they are neither the first nor the last to be interested in cryptocurrencies.

The fundamental difference with the mentioned cryptocurrencies is the fact that the latter are backed by nothing, i.e. they are purely virtual, whereas Stable Coins are digital representations, via the existing assets vehicle that Blockchain is, such as diamonds, gold or silver which would be kept in a safe at the bank.

 

What do you think is the future of cryptocurrency and more specifically of Stable Coins?

Blockchain is a great vehicle for digital assets. This means that any type of use along that line is a good and durable use, either for hollow and speculative assets, like most classic cryptocurrencies, or for tangible assets like Stable Coins.

Moreover, once rid of these "anonymous", "organized crime" and "illegal use" labels, Blockchain can finally be used openly and without restraints to do what it does better than anyone: trace in an immutable way and facilitate exchanges between partners who do not fully trust each other. This inherent immutability of Blockchain comes from its core DNA: all transactions are linked to the previous ones by a mathematical function and stored in a single "book" whose identical copies are shared between the participants. Any modification of this "book" would involve a new calculation of all lines from the modified to the last, which represents a colossal calculation, as well as the change of all existing copies of the "book" by an altered version. This is also very difficult.

 

Why should banks and financial institutions be interested in cryptocurrencies and more specifically in Stable Coins?

Stable Coins are a financial asset’s vehicle in the digital world. Like cash, checks or traveler's checks are in the world of physical payments, or payments by card or digital wallet in the world of digital payments.

Payment institutions are very fond of these new service vectors in terms of offering to their customers.

Moreover, the more we talk about a complete digitization of cash, the more we think of Blockchain as a possible and very interesting medium.

 

What are Worldline's current and future plans in terms of cryptocurrency?

Worldline, the European leader in payments, has created the first Stable Coins instantiation, which is being developed for prestigious clients in Europe.

Worldline’s customers are part of retail, manufacturing and public sectors and we are working on topics such as innovative management of loyalty points and in the creation of "local currencies" for major cities or a "citizen currency" that would reward the good deeds we do for the community at large. These are exciting projects technologically and participatively.