Facebook’s Libra caused a lot of noise in the mainstream media, even getting some regulators to talk about it. Soon, regulators called for Facebook’s crypto-project to be put on hold, until they figured it out.
Recently, BitMEX research put out an analysis that compared Facebook’s “Libra ETF” as a direct competitor to Blackrocks’ “iShares Core U.S. Aggregate Bond ETF [AGG].”
“Libra ETF,” according to the research, would face unnecessary complications with portfolio management. Further, the Libra Association, which consists of many entities in multiple industries across the globe, will be responsible for issuing the ETF. Since there is nothing more than the whitepaper for Libra, there isn’t any clarification surrounding the investment mandate. However, Blockrock’s ETF has one.
The research further stated,
“Perhaps the most significant disadvantage of the Libra product, is that unit holders do not appear to be entitled to receive the investment income. This contrasts unfavorably with Blackrock’s product, which focuses on an almost identical asset class and has an investment yield of around 2.6%.”
Unlike Blackrock’s 0.05% fee, Libra’s fee structure has not yet been mentioned, which is something needed to further clarify the expenses for Libra in a highly competitive ETF market. The same can be said about Facebook’s investment yield, while Blackrock’s investment yield stands tall at 2.6%.
Despite the uncertainty surrounding “Libra ETF,” it will be able to provide a few advantages if the whitelist of addresses is not implemented. These include pseudonymity, a limited amount of censorship resistance, and relatively easy integration with cryptocurrency exchanges.
The BitMEX research further added,
“However, as we mentioned in our Tether report in February 2018, history has shown that these characteristics can cause platforms to ultimately face a choice between implementing KYC or face being shut down by the authorities.