SWITZERLAND, JUNE 18 – Social networking giant, Facebook has revealed that it will unveil its own digital currency, called ‘Libra’ in 2020.
This digital currency idea which is the brainchild of David Marcus (a Facebook Executive) is set to allow Facebook users to send money to each other and pay for goods and services through Facebook’s linked apps such as Messenger and Whatsapp.
“Libra will let you buy things or send money to people with nearly zero fees. You’ll pseudonymously buy or cash out your Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook’s own Calibra wallet that will be built into WhatsApp, Messenger, and its own app,” a report on TechCrunch stated.
According to media reports, the currency was not designed to be like Bitcoin. Instead, it is a form of digital money backed up by a reserve of assets which can be used to make payment both online and offline.
Initially, Facebook wanted Libra to be used mainly to transfer money between individuals in developing countries who lack access to traditional banks. Eventually, the goal was refocused to create the first truly mainstream cryptocurrency: a decentralized global form of payment that is as stable as the dollar. It can be used to buy almost anything and can support an entire range of financial products from banking to loans and credit.
Facebook intends to run the Libra project through the end of the year then push it towards the larger community.
In the meantime, the company has formed a nonprofit Libra Association with 27 other partners to oversee Libra and its development. The partnership includes venture capital firms, nonprofit organizations, crypto firms, and massive corporate finance, telecommunications, and technology service providers, including Coinbase, Mastercard, Visa, eBay, PayPal, Stripe, Spotify, Uber, Lyft, and Vodafone.
These organizations will also contribute to what is known as the Libra Reserve, the asset pool that will ensure every unit of Libra currency is backed by something of intrinsic value rather than by simple scarcity, as Bitcoin is.
Just immediately Facebook announced its anticipation to venture into the cryptocurrency, its stock rose by 4.2% on Monday. Apparently, the company’s shareholders are very impressed with this development and are eagerly anticipating the company’s entrance into the hot cryptocurrency space.