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Pegging Libra to just the $ could soothe regulators, a16z says

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What if Libra wasn’t backed by a basket of international currencies, but only the dollar?

Regulatory pushback to the Facebook-led cryptocurrency Libra has caused major partners — including Visa, Mastercard, PayPal and eBay — to pull out of the Libra Association. But one of the remaining members has floated a major change to the stablecoin that could calm concerns that Libra could hurt the world economy by challenging national currencies for supremacy.

Last week, venture partner Chris Dixon of Andreessen Horowitz’s a16z Crypto, one of the remaining members of the governing Libra Association, spoke  onstage at TechCrunch Disrupt. He said he still believed Libra will launch, but it might require some changes to get the green light from governments. When I asked what changes might assuage regulators, he told me, “For example, denominating the currency in U.S. dollars. I’m giving a hypothetical example. My understanding is the intention was never to create a new currency. It’s much focused on the payment rails.”

We understand that Dixon meant that Libra could be pegged directly to the U.S. dollar instead of to a basket of international currencies as is the plan for Libra.

Originally, Libra was slated to be denominated in…Libra, using the unicode symbol ≋. It would be a stablecoin backed 1:1 with a basket of the world’s top currencies that Reuters says Der Spiegel reports Facebook told a German legislator would be made up of 50% U.S. dollar, 18% Euro, 14% Japanese Yen, 11% British pound and 7% Singaporean dollar.

The purpose of the basket was to make Libra’s value more consistent. A spike or decline in value of any currency in the basket would have limited impact on Libra’s value, and the basket could be altered in makeup to further protect it from fluctuations.

Libra cryptocurrency logo

But if it was denominated in $, the U.S. regulators in particular might be less worried that citizens might choose to use the Libra instead of the dollar. This might demonstrate that Libra sees itself as deferential to the American economic system and government Facebook must answer to.

Conversely, the Libra would become vulnerable to shifts in value of the U.S. dollar. But since many international currencies and financial systems are also linked to the dollar, there at least would be more precedent for how Libra would operate. The move could make foreign governments less skiddish about the cryptocurrency since their national currencies wouldn’t be directly influenced.

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On Monday, the Libra Association will meet to finalize its membership, elect a board and create a charter governing its efforts. How Libra is denominated could be reviewed at this meeting.

Denominating in dollars could quell another worry about the cryptocurrency — that if it became popular and the Libra Association decided to change the basket’s components or remove one currency, it could significantly impact that currency’s value.

The French Finance Minister Bruno Le Maire previously said, “the monetary sovereignty of countries is at stake from a possible privatisation of money . . . we cannot authorise the development of Libra on European soil.”

Facebook’s head of Libra David Marcus has tried to dispel this idea, saying Libra is designed to run “on top of existing currencies . . . there’s no new money creation, which will strictly remain the province of sovereign Nations.” Yet regulators are still largely opposed to its planned launch in 2020.

Pegging Libra to the dollar would give the Libra Association less flexibility to maintain a steady value, but also less power. Governments wouldn’t fear that they’d need to maintain a positive relationship with the Libra Association for fear of their currency being ejected from the basket. It would put Libra more directly in competition with other stablecoins like Tether that are locked to the U.S. dollar.

Chris Dixon DSC02399

a16z Crypto’s Chris Dixon (left) speaks with TechCrunch’s Josh Constine at Disrupt SF 2019

Dixon also announced that Andreessen Horowitz is launching the a16z Crypto Startup School, which will offer a free, zero-equity educational program for blockchain entrepreneurs. The goal is to pass knowledge from seasoned cryptocurrency startup founders to newer entrants to the space.

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Dixon says the hope is that the best students would seek investment from the fund, but that won’t be required. Those interested can sign up for more info on how to apply when it’s available, though videos of the school’s sessions will be available.

Andreessen Horowitz’s commitment to cryptocurrency could make it less likely to abandon the Libra Association than some other payments companies more firmly rooted in the status quo financial system. That loyalty will only pay off if Libra ever passes muster with regulators and actually reaches the market.

NEWS

Google December Product Reviews Update Affects More Than English Language Sites? via @sejournal, @martinibuster

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Google’s Product Reviews update was announced to be rolling out to the English language. No mention was made as to if or when it would roll out to other languages. Mueller answered a question as to whether it is rolling out to other languages.

Google December 2021 Product Reviews Update

On December 1, 2021, Google announced on Twitter that a Product Review update would be rolling out that would focus on English language web pages.

The focus of the update was for improving the quality of reviews shown in Google search, specifically targeting review sites.

A Googler tweeted a description of the kinds of sites that would be targeted for demotion in the search rankings:

“Mainly relevant to sites that post articles reviewing products.

Think of sites like “best TVs under $200″.com.

Goal is to improve the quality and usefulness of reviews we show users.”

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Google also published a blog post with more guidance on the product review update that introduced two new best practices that Google’s algorithm would be looking for.

The first best practice was a requirement of evidence that a product was actually handled and reviewed.

The second best practice was to provide links to more than one place that a user could purchase the product.

The Twitter announcement stated that it was rolling out to English language websites. The blog post did not mention what languages it was rolling out to nor did the blog post specify that the product review update was limited to the English language.

Google’s Mueller Thinking About Product Reviews Update

Screenshot of Google's John Mueller trying to recall if December Product Review Update affects more than the English language

Screenshot of Google's John Mueller trying to recall if December Product Review Update affects more than the English language

Product Review Update Targets More Languages?

The person asking the question was rightly under the impression that the product review update only affected English language search results.

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But he asserted that he was seeing search volatility in the German language that appears to be related to Google’s December 2021 Product Review Update.

This is his question:

“I was seeing some movements in German search as well.

So I was wondering if there could also be an effect on websites in other languages by this product reviews update… because we had lots of movement and volatility in the last weeks.

…My question is, is it possible that the product reviews update affects other sites as well?”

John Mueller answered:

“I don’t know… like other languages?

My assumption was this was global and and across all languages.

But I don’t know what we announced in the blog post specifically.

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But usually we try to push the engineering team to make a decision on that so that we can document it properly in the blog post.

I don’t know if that happened with the product reviews update. I don’t recall the complete blog post.

But it’s… from my point of view it seems like something that we could be doing in multiple languages and wouldn’t be tied to English.

And even if it were English initially, it feels like something that is relevant across the board, and we should try to find ways to roll that out to other languages over time as well.

So I’m not particularly surprised that you see changes in Germany.

But I also don’t know what we actually announced with regards to the locations and languages that are involved.”

Does Product Reviews Update Affect More Languages?

While the tweeted announcement specified that the product reviews update was limited to the English language the official blog post did not mention any such limitations.

Google’s John Mueller offered his opinion that the product reviews update is something that Google could do in multiple languages.

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One must wonder if the tweet was meant to communicate that the update was rolling out first in English and subsequently to other languages.

It’s unclear if the product reviews update was rolled out globally to more languages. Hopefully Google will clarify this soon.

Citations

Google Blog Post About Product Reviews Update

Product reviews update and your site

Google’s New Product Reviews Guidelines

Write high quality product reviews

John Mueller Discusses If Product Reviews Update Is Global

Watch Mueller answer the question at the 14:00 Minute Mark

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Searchenginejournal.com

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