Facebook leads the creation of a new currency called Libra powered by blockchain.
Silicon Valley giant Facebook has finally unveiled its new project! The company started by Mark Zuckerberg is coming together with 27 organizations around the world to start the non-profit Libra Association and create a new currency called Libra.
“Libra’s mission is to create a simple global financial infrastructure that empowers billions of people around the world,” wrote Zuckerberg in a post on Facebook. “It’s powered by blockchain technology and the plan is to launch it in 2020.”
Libra, according to the Libra Association website, wants to “reinvent money, transform the global economy, so people everywhere can live better lives.”
“Being able to use mobile money can have an important positive impact on people’s lives because you don’t have to always carry cash, which can be insecure, or pay extra fees for transfers,” explained Zuckerberg. “This is especially important for people who don’t have access to traditional banks or financial services. Right now, there are around a billion people who don’t have a bank account but do have a mobile phone.”
According to Techcrunch, each founding member paid a minimum of $10 million to join. In joining, they gain one vote — or 1% of the total vote (whichever is larger) — in the Libra Association council, and be entitled to a share (proportionate to their investment) of the dividends from interest earned on the Libra reserve users pay fiat currency into to receive Libra.
Facebook says it hopes to reach 100 founding members before the official Libra launch and it’s open to anyone that meets the requirements including direct competitors like Google or Twitter, writes Techcrunch, explaining that the Libra Association, based in Geneva, Switzerland, will meet biannually. “The country was chosen for its neutral status and strong support for financial innovation including blockchain technology,” according to Techcrunch.
The idea behind Libra rests on a few elements and characteristics:
- Mobile: Libra will be accessible to anyone with an entry-level smartphone and data connectivity.
- Stable: Libra is backed by a reserve made to keep its value stable.
- Fast: Libra transactions are quick and easy, no matter where you are sending, or spending, your money.
- For the world: Libra is a global cryptocurrency that will be available around the world.
- Scalable: Libra will foster an ecosystem of products and services made to help people use Libra in their everyday lives.
- Secure: Libra is a cryptocurrency, built on a blockchain designed with security in mind.
According to The New York Times Times, Facebook has sky-high hopes that Libra could become the foundation for a new financial system not controlled by today’s power brokers on Wall Street or central banks.
“It feels like it is time for a better system,” David Marcus, head of Facebook’s blockchain technology research, said in an interview. “This is something that could be a profound change for the entire world.”
In a Twitter thread, Marcus explained: “The journey begins today, and we’re grateful to have such an outstanding group of cofounding members of the Libra Association — the independent non-for-profit entity that will govern this new network and currency, which we hope will become a public good for the world.”
In addition to the Libra Association, Facebook has created a subsidiary named Calibra. It will be led by Marcus and will will build services on top of the Libra network and currency, starting with a wallet — one of many that will launch on Libra.
“One of the reasons for creating Calibra was to have a dedicated, regulated entity that will make strong privacy commitments to its customers as we’ve heard loud and clear that you don’t want social and financial data commingled,” wrote Marcus on Twitter.
We understand we will have to earn your trust.
He continued: “While Facebook/Calibra will continue to contribute and work on this project, we will not have any special rights or privilege with the Libra Association and the network by the time it launches. In other words, we will have the same governance rights as any other member.”
Libra has three distinct components, according to Marcus:
- a BFT-based (LibraBFT) permissioned (to start) scalable blockchain;
- a reserve-backed cryptocurrency designed to be a medium of exchange;
- a new programming language (Move).
The Libra White Paper, in addition to explaining structure and goals, highlights the need for the involvement of the crypto and blockchain community.
- If you are a researcher or protocol developer, an early preview of the Libra testnet is available under the Apache 2.0 Open Source License, with accompanying documentation. This is just the start of the process, and the testnet is still an early prototype under development, but you can read, build, and provide feedback right away. Since the current focus is on stabilizing the prototype, the project may initially be slower to take community contributions. However, we are committed to building a community-oriented development process and opening the platform to developers — starting with pull requests — as soon as possible.
- If you want to learn about the Libra Association, read more here.
- If your organization is interested in becoming a Founding Member or applying for social impact grants from the Libra Association, read more here.