Ever since Libra was revealed in June this year, it has shaken the world, and even those who laughed at crypto were forced to sit down and take notice. Since then, there has been a debate in the mainstream that Facebook’s brainchild would affect US dominance over global politics and trade. For this reason, a large section of the US Congress and Senate, including Rep. Brad Sherman and Rep. Maxine Waters has demanded a ban on the project.
While the world is fighting over the legitimacy, threats, and repercussions of legalizing Libra, Binance, the world’s leading crypto exchange has expressed its plans to a competitor stablecoin, called Venus. The exchange is positioning its stablecoin as an “independent regional version of Libra.” Given the existing presence of Binance is several countries, in all the continents, it has a major advantage. However, Facebook’s two billion-strong user base remains its brutal strength.
So are we witnessing a war for dominance in the crypto space between two giants? Sure, Binance is nowhere near Facebook’s revenues, but it is years ahead in terms of crypto experience. So who will dominate that future of global crypto payments? Binance chief, Changpeng Zhao had a perfect answer to this.
When a twitter user commented that Binance is moving towards global dominance, CZ said that global dominance wasn’t the motive, and both, Libra and Venus can co-exist.
Pushing adoption, yes. Domination, no. Always happy to co-exist.
In fact, this should help Libra, if you think about it. Will leave it at that. https://t.co/HLSywLb2mi
— CZ Binance (@cz_binance) August 19, 2019
The question is not whether CZ or Libra would want to dominate or not; the question is whether they can dominate or not. At the moment, the answer is simple, they CANNOT, and there’s a good reason why. Let’s take a look at Libra.
Despite Facebook’s mammoth user base, what it lacks in trust, the most important element in crypto. The ghost of Cambridge Analytica still haunts the company, even after trying hard to overcome that. The privacy and data policy issues the company had, will severely restrict Libra’s success, although it is backed by several giants other than Facebook, like VISA, MasterCard, Vodafone, Uber, etc.
As far as Binance’s Venus goes, what it lacks in popularity, and the stature of Facebook to be able to replace fiat currencies, a potential which Libra has. The network has a presence in several countries, but the percentage of people using crypto is still amateur at best. Also, Binance’s dominance will be further restricted if the climate in the US gets further adverse for crypto, as if a US company, Facebook, is treated with strictness, a foreign company might not even see its day in the country.
Also, the crypto market continues to remain one of the most fragmented in the world, despite Bitcoin dominating the space with over 60% market cap. Therefore, at the moment, under current circumstances, Libra and Venus, both are far from being capable of dominating the industry.