Facebook Announces Its Cryptocurrency Named Libra
American social media giant Facebook has announced a digital currency called Libra on the 18th of June. It is a cryptocurrency that aims at allowing billions of Facebook users to make transactions globally. Libra is expected to debut in the year 2020 alongside a blockchain network supporting it. The company also introduced its newest subsidiary called Calibra, which is a payments interface that will leverage the various assets of Facebook like Messenger and WhatsApp.
As mentioned above, Libra is the latest cryptocurrency backed by Facebook. The company believes it will be used for money transfer between people in developing countries; who do not have access to a proper banking structure. The final goal though is to develop the first mainstream cryptocurrency, which is in use more than Bitcoin. Facebook believes Libra will grow into a currency which is stable and decentralized; this means no country will have ruling rights over it. Although the social media company is developing the currency, it has formed the non-profit Libra Association alongside 27 other partners so help it develop and get the cryptocurrency into the mainstream market. These partners include names like Mastercard, Visa, eBay, PayPal, Uber and Vodafone.
The aforementioned organizations together are set to contribute to an asset pool known as Libra Reserve. This will make sure that every Libra (a unit of the currency) is backed by something essential in nature. This is different than how Bitcoin works, as it relies on its rarity and insufficiency to increase in value. Facebook’s Libra is being viewed as a financial behemoth, due to the sheer number of people using Facebook actively, which is around 2.4 billion each month. However, as the company always finds itself in the middle of a privacy debate, it may also face a lot of criticism when it lands next year.