IBM is open to collaborating with the Libra project by Facebook, said Jason Kelley, IBM general manager of blockchain services. Kelley believes blockchain is about collaboration between projects, he commented in a CNBC interview.
IBM is one of the largest companies dedicated to exploring blockchain solutions, and is a part of the Hyperledger consortium of companies interested in the technology, or offering solutions. But IBM is not a member of the Libra Association, and has not expressed intentions of joining.
Blockchain is a team sport… Our clients are ready to work with (Facebook) and we’re ready to work with all of them to bring it together.
Libra is a Form of Asset Tokenization
Kelley commented on the difference between cryptocurrencies and tokenization. Libra will work based on the principle of tokenizing a basket of real-world national currencies. The coin itself will not aim at replacing government-issued fiat. Libra and Facebook have already hinted at how the backing of the coin would be achieved.
Libra expects to be backed by a basket of currencies, of which the US dollar will take up 50%. Another 18% of funds will be held in euros, 14% in British pounds, 11% in Singapore dollars, and the remaining 7% in Japanese yen. The Chinese yuan will not go into the mix of coins, as US regulators see the currency as potentially manipulated for an artificially low international exchange rate.
Facebook’s Libra faces increased oversight in the USA, while Europe remains highly cautious. French and German finance ministers have spoken out with concerns that using Libra may challenge national monetary sovereignty. The European Central Bank, which takes care of the money supply in Europe, is also skeptical about assets that promise to work as a payment system.
IBM Endorses Blockchain, Not Bitcoin
IBM is working on its own distributed network solution, in partnership with the Stellar project. The network of trusted nodes, testing the system with banks for cross-border payments. However, IBM itself holds the position of “Blockchain, not Bitcoin”, and is more interested in the potential of the technology for globalized computation, Internet of Things and other use cases not involving finance.
Up to 500 clients have already used the IBM blockchain solutions. The company regularly organizes hackathons and events to boost developer potential in the crypto space.
IBM has not directly endorsed any coin or token, and is very careful when talking about digital payments. The company aims to offer a system of interbank payments, while remaining compliant. So far, most of the payment mechanisms are just in testing mode.
What do you think about the impact of Libra? Share your thoughts in the comments section below!
Images via Shutterstock