Facebook Unveils Project Libra Cryptocurrency

Social media giant Facebook has finally released the white paper for its forthcoming cryptocurrency project, Libra, earlier today, June 18.

One bold statement made by Zuckerberg’s company is that users won’t need a Facebook account to make use of Libra. Furthermore, the scope of Facebook’s project is vast and includes a new subsidiary called Calibra and a consortium, the Libra Association which is backed by notable entities including, Mastercard, Visa, Paypal, eBay, Uber and Coinbase just to name a few.

Dante Disparte, head of policy and communications for the Libra Association, stated:

“Implied in this project is that wherever the Visa or Mastercard logo are accepted, Libra would follow suit. In so many ways, it’s a great leap forward for cryptocurrencies and, in many respects, a mainstreaming of this asset class.”

Interested customers will have several options when it comes to holding or transferring Facebook’s Libra token. Initially, the token will have a core focus on international remittances.

Calibra:

Facebook’s new subsidiary, Calibra will oversee the development of financial services and products pertaining to the Libra Network, which in time will be entirely governed by the Libra Association. Calibra’s first project will be a digital wallet for use with the Libra coin, which will allow users to transfer funds between each other and also allow users to store their tokens natively.

Users will have access to the wallet’s functionality by the use of an upcoming application, available on iOS and Android as well as through Facebook Messenger and Whatsapp. The Libra blockchain itself will be launched in the first half of 2020.

Disparte was quoted saying:

“The central goal here really is financial inclusion.”

Facebook’s Libra could be globally significant. By allowing access through Whatsapp, Facebook Messenger and Instagram, Libra will be exposed to a user base, which is close to 2.7 billion users. With a global total of 1.7 million people still remaining unbanked, this project is set to reach this population.

Disparte stated:

“The goal of this new project … is to build a financial ecosystem that can plug in and empower billions of people.”

In addition to the above-mentioned payment companies, there are several NGOs involved with the Libra Association, including Creative Destruction Lab, Kiva, Mercy Corps and Women’s World Banking. For any non-profit entity interested in joining the fray as a “Social Impact Partner”, they need to have a five-year track record of poverty alleviation work which includes digital financial inclusion projects in the field as well as an operating budget amounting to more than $50 million.

In addition to the Libra token, Facebook also revealed the release of the Libra Investment Token, which will be available to purchase as dividends to the founding members of the Libra Association and accredited investors.

Since Libra is not actually pegged to any given national fiat currency, the white paper states that users might not always be able to redeem the token for any fixed amount of fiat; however, the social media giant claims that it has chosen the reserve assets in an effort to minimize volatility.

All reserve assets are held by “a geographically distributed network of custodians” to secure decentralization. However, the reserve itself is managed by the Libra Association, which is the only entity that can mint and burn the coin.

New Libra tokens are minted only once authorized resellers have bought the coins from the Libra Association with enough fiat to back their value. They are burned as soon as an authorized reseller sells the token back to the association in return for the underlying assets.

The white paper states:

“Since authorized resellers will always be able to sell Libra coins to the reserve at a price equal to the value of the basket, the Libra Reserve acts as a ‘buyer of last resort.'”

Facebook also states that the software under the hood of the Libra blockchain is indeed open source. The reason for this is to create a new and interoperable ecosystem of financial services and to expand upon global inclusion.

Lastly, Facebook also released a video dubbed “Introducing Libra” on the Libra Association YouTube channel, watch it right here.