Facebook announced the launch of in-development global cryptocurrency, called Libra, with the blockchain-based network that will support it. Libra cryptocurrency — backed by Mastercard, Visa and PayPal, which will allow people to transfer their money with little cost — is going to come to the market the next year.
So far, it has enlisted 28 firms, who each invested a minimum of £8 million to be a founding member of the Libra Association, an independent not-for-profit membership organization. The partnership includes venture capital firms, nonprofit organizations, crypto firms, and massive corporate financial, telecommunications, and technology service providers, including Coinbase, Mastercard, Visa, eBay, PayPal, Stripe, Spotify, Uber, Lyft, and Vodafone. Libra Association wants to attract 100 businesses in time for launch — the first half of 2020.
Libra is open source, meaning anyone will be able to launch their own digital wallet and include the currency.
Libra Global role forecast
Libra, will be managed by an independent foundation via an encrypted blockchain ledger. But unlike Bitcoin, Libra will not try to displace the government financial regulation role.
Libra will be used mainly to transfer money between individuals in developing countries who lack access to traditional banks. Libra aims to create the first truly mainstream cryptocurrency: a stable decentralized global form of payment that can be used to buy almost anything and can support an entire range of financial products — from banking to loans and credit.
However, Libra could scrape away at the status of the US dollar as the universal “reserve” currency and if it takes even 5% of that global role it could affect the status and power of the American and Global economy.
In general, Facebook hopes to take over the global remittance market by lowering fees to almost nothing. Such a move would shake all the competing services, including local banks and informal financial networks.
Facebook will operate its own digital wallet for people to spend Libra, known as the Calibra Wallet, which will be available in WhatsApp, Facebook Messenger and as a standalone app. It planed, that users will be able to transfer money to each other initially, at low to no cost.
Calibra Wallet will be opened up to additional services, for paying bills, buy goods by scanning a code or accessing public transport, etc.
Account information from Calibra will not be shared with Facebook to improve things like ad targeting, except for “limited cases” where this data may be shared “to keep people safe, comply with the law, and provide basic functionality to the people who use Calibra,” Facebook wrote in a statement.
Despite all the promising Libra goals and support from huge businesses — not everyone is enthusiastic about Libra project. For example, Bitcoin skeptic and economist Nouriel Roubini is no fan of Facebook’s ‘Libra’ cryptocurrency at all. Roubini argued that Facebook’s cryptocurrency was only designed to grow the social media giant’s profits. Per Roubini, Libra is a ‘monopoly scam’ given that Facebook boasts of billions of users spread across the world:
According to Roubini, potential users of Libra from USA or Europe might be turned off by a cryptocurrency that’s also linked to relatively unstable currencies from emerging markets for instance:
Roubini also predicted that Libra will generate massive revenues for the social media giant. Specifically, Roubini claimed Facebook will earn interest on user balances by investing them in treasury bills. But in Roubini’s opinion users should not expect to earn any interest on their balances:
Also, other crypto players agreed with him on his warning of the dangers of a centralized cryptocurrency:
Nevertheless, Libra is a really ambitious project. Nobody from the crypto society ever got such huge support from business giants and government.
Actual ways to get Libra will be unknown until the official info release. But we suppose that users will be able to buy it directly from the company and from exchanges, including ChangeHero. Also, there is unconfirmed information that the project will have ATM-like machines to buy Libra.
Our ChangeHero team is really enthusiastic about Libra and looking forward its integration to our platform. We believe, Facebook and Libra could change the way of Global Financial Operations. There is a lot of official information about to come, that would dispel or confirm rumors around Libra one by one. We watch all the Libra updates and sum up the most important information for you in @Changehero_io Twitter. Follow us and be up to date too!