Facebook is fearing resistance from the regulatory authorities ever since it has announced its intention to introduce Libra, its cryptocurrency. To induce credibility, Facebook has set up on independent foundation to manage the whole thing. The USP of cryptocurrency is its blockchain platform consisting of an electronic ledger which can be viewed and validated by many people. It is very difficult to hack it and it provides anonymity.
Bitcoin is a cryptocurrency, but Libra differs from it. Libra proposes to operate against a pool of assets including fiat currencies and precious metals. Libra will be issued against this asset pool at an agreed exchange rate. Libra can be redeemed against that pool.
Libra could be more efficient than fiat. It could facilitate cross-border transfers at lower cost. It could disrupt the global remittance market.
Yet, we have to be cautious. There was a crypto fraud of OneCoin floated by Dr. Ruja Ignatova in 2014. She later employed her brother Konstantin who later played a larger role. She worked for McKinsey in Bulgaria for sometime. OneCoin was more efficient than Bitcoin. It ran exchange and used blockchain. Its mining system was similar to bitcoin. As Bulgaria is EU nation, the exchange accepted many currencies and issued OneCoin but when OneCoin was exchanged, it offered only Euro.
OneCoins were marketed in investor meets where educational kits were sold. These explained how crypto and OneCoin worked. There were tokens in the kits which could be exchanged for OneCoin. Investors were offered commissions in terms of OneCoin tokens to sell these kits. This was a multi-level marketing scheme. The exchange rate was pushed up by such circular system (from 0.5 euros to 38 euros). In reality there was no private blockchain. The apex of the pyramid issued OneCoin at their whims and fancies. It was an amalgom of Ponzi and crypto scheme. It defrauded investors of several billion dollars. It attracted the attention of the regulators. The exchange stopped working, and still the scheme continued operating. Investors were reluctant to complain even after knowing they had been defrauded. They were playing a role in the Ponzi. Dr. Igantova disappeared in 2017. Her brother Konstantin took over. He was arrested in the US in March 2019. Several other founders too were arrested. Authorities recovered some amount in different countries, but only a fraction of $3.7 billion invested initially in it.
Thus unregulated crypto is fraught with risk.