Andreas Antonopoulos, the author of Mastering Bitcoin and a well-known Bitcoin influencer, spoke about whether he was worried about the prospect of a Facebook or Telegram Coin during a recent Q&A session on YouTube.
Antonopoulos stated that he was always of the opinion that there would be a corporate coin in the future, which was why he was not worried about it. He added that there would be cryptocurrencies developed by multinational banks that would be pegged to fiat currencies aka stablecoins.
Further, the author believed that even central banks around the world would launch their own cryptocurrencies such as the Fed Coin or Digi Dollar and said that the one aspect which would be common here would be “fiat”. He said,
“They are centralized, censorable, bordered, controlled, [permissioned], and closed systems… that have the same characteristics of fiat, but are simply now digital. Guess what? We already have digital fiat. All banks operate primarily with digital fiat. About 92% of the money supply in the world is digital fiat, with no physical equivalent in cash.”
This was followed by Andreas stating that the “only difference” was the implementation, shifting from Microsoft SQL Database to a blockchain database. However, it would still be controlled by a central operator, he said.
The author went on to state that in reality, Facebook Coin could not be used to make cross-border transactions without complying to banking regulations. He added that the social media giant would “not offer” their digital currency without strict KYC/ AML policy, remarking that it would not be any different from PayPal. He said,
“Facebook will not produce a coin that is censorship resistant, open, decentralized, neutral, or borderless. It will not be similar to any cryptocurrency. They will recreate the world of digital dollars, just like PayPal and Venmo, etc. […] They will be competing against other banks.”
Andreas further stated that the coin offered by corporates such as Facebook were not any different from digital fiat offered by banks. However, the bonus point with these corporates was that they would provide better user experience, service, transaction speed, and brand recognition for their virtual currencies than Visa, JP Morgan Chase or PayPal. He said,
“None of this competes against cryptocurrencies. The differentiator for cryptocurrencies is freedom. Open, neutral, decentralized, borderless, and censorship resistant money for the entire world, without discrimination, identification, or control.None of those features can be offered by these coins.”
He also claimed that FaceCoin would not “change anything” as cryptocurrencies are “needed” by people living under currency controls, authoritarian governments, failing fiat systems, and corrupt institutions. The Bitcoin proponent stated,
“Guess what? About 90% percent of the human population lives under [or close to] those conditions. For them, ‘FaceCoin’ isn’t a solution. It is simply another broken, centralized currency. Open systems are the solution; the problem is caused by centralization of control. That problem cannot and will never be solved by ‘FaceCoin.’”
He also implied that there would be no privacy with FaceCoin, as it would document all the transaction activity of its users. He added by saying that transactions would also be censored and accounts frozen, if the required information was not disclosed. Moreover, the author claimed that Facebook and FaceCoin would probably be more aggressive than PayPal.
“They will apply surveillance to all of your transactions, selling that data to hundreds of various… commercial companies and intelligence agencies, totalitarian regimes and [entities] like that. Facebook will sell the financial [data] of dissidents to the dictators hunting them down and get people killed. Because that is how fiat works.”
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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.