Facebook has revealed the cryptocurrency Libra that it’s been developing with a pool of other companies in the hopes of building a global digital currency that can rival the US dollar.
Set to be launched mid-2020, the Libra’s aim is to disrupt the financial sector, which has largely been unchanged by the internet revolution, by making the transfer of money around the globe less cumbersome and expensive.
The Libra is designed to be more stable than other cryptocurrencies such as Bitcoin by being backed by a reserve of real assets, the Libra Reserve, giving it intrinsic value.
While Facebook led the development of Libra, the currency is being created by 27 other companies and organisations, including MasterCard, Visa, Uber, Spotify and Vodafone who form the Libra Association. The association is a non-profit, Geneva-based group that will govern the currency.
Facebook says it hopes to grow the association to 100 members by launch date, by which it would have stepped down from its leadership role.
Founding members each paid a minimum of USD$10 million to join, giving them the option to become a validator node operator and also a vote in the Libra Association.
Facebook also revealed its new subsidiary called Calibra, led by Marcus, which will be the “digital wallet” for the currency where users can send and receive Libra dollars.
Calibra will be built into Whatsapp and Messenger, and will also be available as a stand alone app for non-Facebook users.
Having the currency operate on a separate platform means Libra users’ activity is separated from Facebook, meaning it’s not shared with other parties, such as advertisers.
While Facebook is the only member to announce a digital wallet, others such as MasterCard and Visa would be able to build their own in the future.
Source: Ad News Australia