Facebook reveals details on new cryptocurrency Libra

Libra will allow users worldwide to make financial transactions starting from 2020.

The digital currency is described as a “global, digitally native, reserve-backed cryptocurrency built on the foundation of blockchain technology”. It allows individuals that may not necessarily have a bank account to transfer money and use it as a method of payment.

Authors of the Libra whitepaper wrote:

“Imagine an open, interoperable ecosystem of financial services that developers and organizations will build to help people and businesses hold and transfer Libra for everyday use.

“To enable the Libra ecosystem to achieve this vision over time, the blockchain has been built from the ground up to prioritize scalability, security, efficiency in storage and throughput, and future adaptability.”

Libra has not been designed to be a speculative asset like Ether and Bitcoin, but rather a digital currency that is backed by a reserve of assets.

Blockchain will be used to power Libra allowing for it to scale to billions of accounts, ensuring the safety of funds and financial data, and as well as being able to “power the Libra ecosystem’s governance”.

Facebook’s blockchain chief David Marcus said:

“This was going to be a very involved endeavor that will not only require breaking new ground, but also coming up with a new decentralized form of government.”

Libra will not be completely controlled by Facebook but instead run by a governing, non-profit entity named the Libra Association, with 27 other partners to oversee it. Some of the partners include Visa, Mastercard, Uber, Coinbase and PayPal. The Libra Association will also contribute to the Libra Reserve.

Dante Disparte, the head of policy and communications for the Libra Association told The Verge:

“The goal really is to improve financial inclusion and do the transfer of value and payments what the internet has done to the transfer of communication and information.”

Marcus says:

“One of the values that Mastercard and Visa bring to this network is trying to help merchant acceptance, and getting their merchants to accept Libra. That will provide a lot of utility.

“If this ecosystem is successful, you’ll see a whole lot of financial service innovations on top of it.”

Facebook also revealed that it will be launching a subsidiary called Calibra which will offer a digital wallet for Libra, that will handle its crypto dealings and  provide support to customers. Calibra will also allow users to send payments over WhatsApp and Facebook Messenger.

Although the social media giant has stressed that Calibra will not be used for advertising purposes. 

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