What is Facebook’s Libra?

Introduction

Libra is a cryptocurrency coin created by Facebook that is slated for release in 2020. Libra is going to be a stablecoin which is backed by the Libra Reserve, which is a reserve of real assets.

According to its white paper, “Libra is a simple global currency and financial infrastructure that empowers billions of people.” Facebook created Libra in hopes that Libra will make transferring money online faster and cheaper with nearly zero fees, and it will improve access to financial services, especially for people without bank accounts or with little access to banking.

  Official website: https://libra.org/en-US/

   Whitepaper: https://libra.org/en-US/white-paper/

The Libra Blockchain 

Libra will be built upon a blockchain platform called the Libra Network, which will allow the network have the ability to scale to billions of accounts fast, making Libra a suitable choice for everyday uses like online purchases.

The Libra Association

Though Facebook invented Libra, it will not manage it. Instead, an independent, NPO called the Libra Association will oversee Libra and govern the currency. The Libra Association is made up of companies and nonprofits from around the world based in Geneva, Switzerland. It currently has 28 founding members — including payments, technology, telecommunications, venture capital and blockchain companies, as well as other NPOs.

Calibra and the wallet for Libra

Calibra is a subsidiary by Facebook for developing financial products and provide services through Libra. The subsidiary’s first product will be the Calibra Wallet, a digital wallet that will let users store Libra and send it to friends as quick and easy as how they would send a text message at near zero cost. The Calibra Wallet will be a standalone app, and will plug-in to Facebook's Messenger and WhatsApp. Being an open-source code as explained above, other companies and entities will also be able to develop wallets and other tools to use Libra.

Privacy

To protect user privacy, Facebook plans to keep the Calibra independent. But it’s Facebook, so...

Can Libra pull it off?

Now that Facebook is trying to reinvent money, governments are very much concerned about a new form of money that will suddenly be available to Facebook's 2.4 billion users, and they are citing that Libra raises potential issues regarding privacy, money laundering, consumer protection and financial stability. Facebook will attend two public Congressional hearings, to evaluate Libra's potential impacts on consumers and global financial systems. Some have proposed legislation to stop Libra altogether.

Yet, one cannot deny that Libra has the potential to send money easily from one corner of the world to another. With such connection, that would accomplish Facebook’s mission of making the world feel smaller.