Is Facebook´s Libra an undercover ETF? BitMEX and others think so

28 Jun, 2019 | Updated: 28 Jun, 2019
by Alberto Arnaldo
Opinion
Is Facebook´s Libra an undercover ETF? BitMEX and others think so

Once upon a time dubbed as a stablecoin, the public´s view on Facebook´s take on blockchain and crypto keeps on evolving. The similarities between exchange traded funds (ETF) and Facebook´s Libra have been pointed out on the latest entry of BitMEX´s research blog.

The researchers describe Libra´s announcement earlier this month as a “direct challenge” to Blackrock´s iShares Core U.S. Aggregate Bond ETF, given that per Libra´s whitepaper, both will be focused on fixed income and government bonds.

From a comparison between both ETF´s, Blackrock concludes that Libra displays some noticeable weaknesses, such as transparency and lack of distribution of investment income to holders. However the consumer reach of platforms such as Whatsapp and Instagram, is accounted for as a commercial advantage.

Others have highlighted the coincidences between both business models before, including Dave Nadig, managing director of ETF.com. In an article, he recently explored the possibility that Facebook might be searching for a “regulatory angle by which they think they will be able to dance through the securities registration minefield”.

Interestingly, the latest issue of BitMEX Crypto Trader Digest came with a discrepancy attached between Arthur Hayes, CEO and co-founder, and his research team. The entry on Libra was preceded by the following disclaimer:

“Obviously BitMEX must weigh in on the implications of Facebook's new Libra project. BitMEX Research and myself have differing views on what Libra is, and its future implications for the financial services industry. I hope that our analysis stands out above all the other pundits offering their opinions on the same topic”.

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