On June 18, Facebook released a white paper on its blockchain project Libra. In a short while, Libra sweeping the crypto, financial and technological Industries. On the evening of June 19^th, SheKnows, an 8btc interview column, invited Meng Yan, the author of 《Facebook数字货币：缘起、意义和后果》, the initiator of the token economy and deputy CEO of CSDN to have  an insight into the white paper.

Key points：

1. The widest application of blockchain is open finance, which is to break the right of a small group in conference rooms to determine the financial rights of most people. Libra had the courage to pick this out as soon as it was released.

2. A small part of the Chinese people will be nervous, worried about backwardness, not about backwardness in technology, but backwardness in ecology.

3. Idealists and businessmen will eventually work together to create finance and economy in the future.

4. In the digital economy, all applications will be financialized

5. In the long run, Libra will drive a new digital assets move forward, as well as an incentive system based on creditor’s rights and interest.

6. FB faces two major risks: first, securities identification, second, anti-money laundering, anti-corruption and anti-terrorism.

7. Calibra made a compromise in centralized management of users’ private keys . It’s a realist approach.

8. The value behind Libra was its ability to convert into legal currency and its trust in the future.

9. Libra’s spirit: openness, rebellion, and momentum.1.

10.The Crypto will always have a place, and the advantage of giants is their disadvantage.

Following is the edited dialogue with Meng Yan.

About Libra

Q1: What is the most surprise after the release of white paper of Libra as it claims to establish a simple, borderless currency and financial infrastructure for billions of people?

Meng Yan: First, the white paper talks about financial openness more direct than I expected. Recently, I attended several presentations on the international blockchain projects, and I have heard a lot about open finance, borderless finance, financial democratization and so on. In fact, it shows that the leaders in the U.S. blockchain and digital currency are slowly getting consensus. The widest application of blockchain is open finance, which is to break the right of a small group in conference rooms to determine the financial rights of most people. Libra had the courage to pick this out as soon as it was released.

Second, the dual-coin structure, Libra + Investment Token. This is concern for my research on economic incentives. My own research shows that the monetary model can not be stable, it must rise and fall. It’s a great pleasure to see its structure is dual-coin.

Q2: I see many people in Wechat moments deliberately @ some BAT(Chinese Internet giants) friends, some cynicism, some worries, some tensions. What do you think is most likely to make Chinese nervous?

Meng Yan: Most Chinese people are not nervous. We are confident that they will never be able to do it. We believe that American friends and friends from other countries will jointly suppress it. A small part of the Chinese people will be nervous, worried about backwardness, not about backwardness in technology, but backwardness in ecology.

Q3: In your article, you said that: Facebook’s crypto will be the most significant event in the field of crypto since the launch of Bitcoin’s main network in 2009, marking the upgrade of non-state-issued digital currency applications from 1.0 to 2.0. Why do you make such judgement?

Meng Yan: Formerly a Germanic tribal riot, it is now a Roman Legion uprising stationed outside. Some people are comparing the technical indicators, and they are completely mistaken about the key points The key point in this rebellion is the Roman general!

About open finance

Q4 : You said three things are important in open finance. One is the infrastructure of open finance, which mainly refers to technology; the other is the open token incentive model. And the third is the open source supervision. By contrast, the Libra project seems to have achieved both the first and the second. Is it? What do you think?

Meng Yan: Open finance is a big topic. As for Libra, it is not completely achieved, after all, it is still a restriction on access. Token incentives are also not open, because only nodes have investment Token. Open source regulation can happen in the future. It really needs the government to take the lead. Take your time.

About commercial opportunity

Q5 : After giants like Facebook join, the movement will move from idealistic 1.0 to commercial 2.0. Idealism will always be part of this movement, but capital and commercial forces will gradually play a leading role. What energy do you think idealism and business power will generate in the past and in the future?

Meng Yan: There are two parts of idealism, one is the first password punk to enter Bitcoin and some supporters of open finance, the other is the post-90s and post-95s. These idealists will continue to do well in anonymous digital assets, public chains, mining, DeFi and exchanges. Don’t tie them down for such reasons as the real economy. They will come up with new forms of economy. Commercialism is different. It is a reformer, not a revolutionary, who tries to bridge the reality and ideals, bring the funds, talents and assets of the traditional world to the new world, and pay attention to the transformation of the real world order by new technologies. Both are important and will eventually work together to create the future of finance and economy.

Q6: After the release of Libra, there may be many new business opportunities, such as online payment, acceptance and transaction based on Libra. Libra banking in third world countries, such as payment, lending, financial management and so on. Where do you think the business opportunities are?

Meng Yan: First, financial services. At first, it’s probably DeFi and Staking, which are the unique models of blockchain, moving up to Libra, and then slowly to various insurance and fund financial services. All applications will be financialized.

Second, community integration. I know that there are some token communities in Southeast Asia that are already very active in thinking about how to connect to the Libra ecosystem. For example, an e-commercial company. Why not join in and let his members earn Libra?

About integration of market and traditional finance

Q7: Will FB’s crypto have an impact on digital currencies such as BTC and ETH? What may be the specific manifestation?

Meng Yan: FB’s crypto is good for BTC in the short and medium term because more money is coming in. In the long run, Libra will lead digital assets, as well as a set of incentive system mainly in the form of creditor’s rights and interest, which will gradually marginalize the traditional incentive mode of soaring and plunging. But among the traditional digital currencies, BTC suffers the least impact because it is simple enough and basic enough to be a digital gold.

Q8: Facebook has gathered a number of industry giants. Will this trend continue in the future? Will this trend lead to a further separation between the mainstream world and the crypto world such as Bitcoin? What do you think of the situation in which “giants go their own way”?

Meng Yan: Giants like Google and Amazon are under less pressure than FB and will not issue crypto in the short term. But if the FB has gone through and survived, it might be too late, can they fight the FB system? I’m sure they must. If they not, they will all subordinate to Facebook.

Q9: You mentioned in your article that FB is likely to take similar role as banks in the future, so will this be a challenge for bank’s status?

Meng Yan: It must be a challenge. Now it doesn’t FB, but Libra. FB seems to embody a relatively large mind, sharing interests with everyone. As for whether it will actually evolve into an oligarch republic, let’s wait. There is no doubt that banks are unhappy. They’ve led a good life for hundreds of years. Why can’t they be challenged?

About supervision

Q10: The US SEC is very strict in the regulation of digital currency. What problems will FB’s crypto face when issuing in the regulation?

Meng Yan: Libra is a symbol of digital creditor’s rights and a security, which should be managed by SEC. The main risk is securities identification. Whether Libra is a securities?  Whether Libra Investment Token is a securities? Whether it accord with issuance regulations. Second, as a currency, it should fight money laundering, corruption and terrorism. Calibra made a compromise in centralized management of users’ private keys . It’s a realist approach.

About stablecoin Libra

Q11: The white paper shows that Libra is fully supported by real asset reserves. For each newly created Libra crypto, there is a basket of bank deposits and short-term government bonds with corresponding value in the Libra reserve to build people’s trust in its intrinsic value. What do you think is the real value behind Libra as a monetary unit?

Meng Yan: The value behind Libra was its ability to convert into legal currency and its trust in the future. Commercial bank’s deposit reserve must be adequate, as the central bank does not care your bonds, but the amount of reserves. Commercial banks can not use short-term government bonds as collateral to issue credit. But Libra can. It can select its own government bonds and put them on the left end of the balance sheet, then issue Libra’s stable coin on the right. The central bank has the privilege to choose the issuing currency of mortgage assets. So Libra brazenly declared that it had central bank privileges.

About spirit in white paper

Q12: The spirit of open source, finance and equality runs through the whole white paper, which also shows that Facebook stands at the height of solving common problems of human destiny. The white paper also clearly states that openness is the essence of Libra’s spirit. Can you summarize its spirit in a few words?

Meng Yan: Open, rebellious and vigorous. To be frank, Libra’s specific plan is eclectic, but the white paper is very sharp.