Opinion | Facebook’s Libra is an attempt to mask a promise as a token5 min read 22 Aug 2019, 02:21 PM IST
Since Libra would be issuing promissory notes that function as money, it is essentially a banking venture dressed up in cryptography
Cryptocurrency enthusiasts have always erred in identifying modern money: they have never appreciated the fundamental difference between a token and a promissory note. A token is not a promise to pay something; it merely represents something else in a more convenient form. Rather than carry your coat around with you in a restaurant, you keep it at the door and get a numbered token. Your coat token is not a promise to return any coat on demand; it represents your particular coat. Facebook’s proposed cryptocurrency plays on this confusion between a token and a promise; one might even say it weaponises it. After all, the business of issuing promissory notes that function as money is called banking. Libra is a banking venture dressed up in cryptography.