On June 18th, social media and tech giant Facebook announced their entry into the blockchain sector. Their cryptocurrency token, called Libra, was announced alongside the digital wallet product Calibra and this White Paper. The announcement covered the aims and goals of the project, and stated that the launch would occur sometime in 2020.
Libra’s Goals
Libra’s aim is to provide a global financial platform, specifically targeting the “1.7 billion adults” who don’t have convenient access to financial products or traditional banking services. It also wishes to disrupt traditional methods for peer-to-peer transactions both nationally and internationally by providing and a secure and accessible remittance service to its customers.
“The world truly needs a reliable digital currency and infrastructure that together can deliver on the promise of “the internet of money.” states the Libra Whitepaper. “Moving money around globally should be as easy and cost-effective as (and even more safe and secure than) sending a text message or sharing a photo, no matter where you live, what you do, or how much you earn. New product innovation, and additional entrants to the ecosystem will enable the lowering of barriers to access and cost of capital for everyone and facilitate frictionless payments for more people.”
How is the coin financially backed?
Libra will be financially backed by a reserve of multiple fiat currencies, as well as short-term government bonds, with more Libra coins being minted as more assets are added the reserve. This structure aims to keep the price of Libra consistent, and to mitigate the likelihood of large fluctuations in the market price of the cryptocurrency. If, for example, one of the currencies that makes up the reserve were to have a severe drop in price, the value of Libra won't be significantly affected as the other fiat currencies held in the reserve will assist in keeping the price stable.
Who will operate the Libra wallet?
Calibra will be the wallet provider of the Libra cryptocurrency, and is a subsidiary of Facebook. The purpose of setting up the subsidiary is to make sure that the project can be run independently from Facebook. Users’ personal information will be kept separate from their Facebook accounts.
The wallet will be a standalone app that can be used for everyday transactions as well as peer-to-peer payments, and will also be integrated directly into other Facebook-owned apps such as WhatsApp and Messenger.
Libra Association – A body of many
Companies such as Mastercard, Uber, eBay, Visa, PayPal and Spotify have already invested money into the Libra project and have joined the Libra Association Council. The council is a not-for-profit and independent membership organisation which will be based in Geneva, Switzerland. “Members of the Libra association will consist of geographically distributed and diverse businesses, non-profit and multilateral organizations, and academic institutions.” states the Libra White Paper. Those who are a part of this council will be able to vote on operational matters such as policy and technical implementations.
Facebook’s entry into the blockchain sector will push the industry forward significantly.
Facebook entering the blockchain market is significant as it represents a major multinational corporation embracing the potential of blockchain technology and its future role in the financial sector. With such a large user base (roughly 2.4 billion worldwide), Facebook has the potential to assist in the adoption of blockchain payment systems.
Libra Association – A body of many
Companies such as Mastercard, Uber, eBay, Visa, PayPal and Spotify have already invested money into the Libra project and have joined the Libra Association Council. The council is a not-for-profit and independent membership organisation which will be based in Geneva, Switzerland. “Members of the Libra association will consist of geographically distributed and diverse businesses, non-profit and multilateral organizations, and academic institutions.” states the Libra White Paper. Those who are a part of this council will be able to vote on operational matters such as policy and technical implementations.
Facebook’s entry into the blockchain sector will push the industry forward significantly.
Facebook entering the blockchain market is significant as it represents a major multinational corporation embracing the potential of blockchain technology and its future role in the financial sector. With such a large user base (roughly 2.4 billion worldwide), Facebook has the potential to assist in the adoption of blockchain payment systems.