Facebook will launch Libra Digital Currency in 2020
On 18 June 2019, Facebook co-founder Mark Zuckerberg revealed the details of the company’s new plans for the cryptocurrency world. Facebook has collaborated with 27 organizations around the world to start the non-profit Libra Association and create a new currency called Libra.
Facebook has launched a test version of blockchain. It is open-source software with Apache 2.0 License, which means developers can experiment with building applications on the platform and submit feedback on the code. Facebook is launching this Libra Digital Currency in 2020.
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Libra digital currency can be used anywhere from grocery stores to malls. You will easily pay or buy Libra currency online with the help of third-party wallets. Also, Facebook has made its own Calibra Wallet which will be built into WhatsApp, Messenger apps.
This will make the transactions super easy, secure, and free for worldwide users. All of this is built on blockchain technology. It’s decentralized, meaning it’s run by many different organizations instead of just one, making the system fairer overall.
The Libra Association:
The Facebook company has collaborated with 27 different organizations for this big project. The collaborators and supporters in the nonprofit Libra Association include Facebook, Calibra, Paypal, Visa, MasterCard, Uber, Andreessen Horowitz, Mercy Corp., Vodafone, Union Square Ventures, Ribbit Capital, Thrive Capital, LYFT, Stripe, Breakthrough Initiatives, eBay, Spotify, Anchorage, Xapo, Bison Trails, Creative Destruction Lab, Coinbase, Mercado Pago, PayU, Iliad, Farfetch, Booking Holdings, Kiva and, Women’s World Banking.
All partners have invested at least $10 million in the project’s operation. After launching the Libra project in 2020, they will promote an open-sourced Libra blockchain and developer platform with its own Move programming language, plus sign up businesses to accept Libra for payment. There will be discounts and rewards for customers who use Libra Digital Currency.
Facebook is also hoping to increase the numbers to 100 founding members until the Libra launch. The funding is open to all who meet the requirements. That means, even Google and Twitter (Now ‘X‘) can collaborate in this big project. The Libra Association is a purpose-built, independent non-profit organization headquartered in Geneva, Switzerland.
Facebook Calibra Wallet
Facebook is also launching a subsidiary cryptocurrency dealing company called Calibra. It will manage all transactions, user’s privacy, and data. Your identity will be hidden for publicly visible transactions. All partners will earn interest on the money (Libra) in your wallet.
The Risk and Reward of Facebook Libra:
With the use of Facebook Libra, international transactions will have the lowest fees which also include credit cards. This might affect the Facebook Ads Revenue as many promoters use credit cards and the transaction fees are currently high.
On the other hand, the 1.7 billion people who lack a bank account might choose whoever offers them a financial services alternative as their online identity provider too.
Currently, Bitcoin and Ethereum cryptocurrencies in the market are not properly engineered. Also, Their unpredictable prices make them restricted to regular market transactions. But now, as giant Facebook is coming into the crypto market, digital currencies are gonna rise up so fast.
Currently, Facebook has 7 million advertisers and 90 million small businesses, billions of users with its user experience data. This could be a game-changer!
‘Evolution of Paypal’
Paypal is famous for its easy international transactions. Now Facebook is trying to make Libra the evolution of Paypal. Facebook Libra will be easy to use, easy to set up, better option as a payment method with the lowest fees. In the current world, we use insecure checks, high-rate interest, or transaction fees for payments. This all will be eliminated by Libra cryptocurrency.
“Success will mean that a person working abroad has a fast and simple way to send money to family back home, and a college student can pay their rent as easily as they can buy a coffee,” Facebook writes in its Libra documentation.
How does Facebook Libra Cryptocurrency work?
Through the Calibra wallet, you will be able to send or buy Libra. Calibra will be integrated with Facebook Messenger, Instagram, and WhatsApp. For example, there will be a button in Instagram or WhatsApp to allow the user to send or receive money internationally. It will be as easy as sending a text or GIF! There will be also a separate Calibra App for users.
Other third-party applications, banks, and companies can make similar apps to support Libra currency for their transactions. Because of Facebook’s large number of users, cryptocurrency will get huge exposure in 2020.
Libra will be backed 1:1 by a bundle of financial assets likely to include bank deposits and short-term government securities from the US Treasury, among others. This will help it avoid the volatility that has plagued other cryptocurrencies like bitcoin.
This will make Libra a ‘stable’ digital currency. There will be no ups and downs like Bitcoin or other cryptocurrencies. The Libra Blockchain will be backed by Libra Reserve, “a reserve of real assets” that will provide the cryptocurrency with “stability, low inflation, global acceptance, and fungibility”.
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What was Facebook’s Libra Cryptocurrency?
Announced in 2019, Libra aimed to be a stablecoin, a digital currency pegged to real-world assets for stability. Though planned for global use, the project faced regulatory hurdles and was ultimately shut down in 2022.
Why did Facebook create Libra?
Facebook envisioned Libra as a way to simplify global money transfer and financial inclusion, especially for the unbanked population. It aimed for low fees and ease of use through integration with Facebook products.
What happened to Facebook’s Libra Cryptocurrency?
Regulatory concerns regarding financial stability and data privacy led to Libra’s name change to Diem in 2020. After continued challenges, the project was ultimately abandoned in January 2022, with the underlying technology sold off.
Can I still use Libra Cryptocurrency?
No. The Diem Association, the governing body, disbanded in 2022. Libra/Diem never officially launched, so there’s no functional cryptocurrency to use.
Are there other stablecoins like Facebook’s Libra?
Yes. Several stablecoins exist, pegged to various assets like USD or a basket of currencies. Popular examples include Tether (USDT) and USD Coin (USDC).
What are the risks of stablecoins?
While stablecoins aim for price stability, they can still face fluctuations and depend on the backing assets’ credibility. Regulatory uncertainty and potential technical issues are also risks to consider.
