In 2014, the former president of Pay Pal David Marcus joined Facebook to run the Messenger app. For him, the blockchain was no more a new term and that’s what made him to run the new blockchain group of Facebook. He was asked to introduce a new group in the crypto world. In December, 2018 Facebook has made its official announcement where it was stated that WhatsApp stablecoin integration put on work which focuses particularly India, a market with over $69 billion in remittances.
What Libra means actually?
In May of this year, Facebook registered Libra Networks LLC in Geneva, Switzerland, one of the most friendly regulatory environments for cryptocurrency projects, to create a new digital currency Libra. Libra was positioned as the new cryptocurrency for the everyday online consumer, backed by one of the largest companies in the world.
In its highly anticipated white paper, the Libra Association announced that “Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people.” The new digital currency will be built on the Libra Blockchain and fully backed by the Libra reserve, a basket of fiat currencies and ‘other assets’. The project claims to be decentralized and governed by the Libra Association.
What’s the need of Libra?
The white paper was not very unique in its problem statement, citing that 1.7 billion adults globally remain outside of the financial system and that Libra will help connect the world in a unified financial ecosystem.
How does Libra work?
By now you know the basics of Libra. Cash in a local currency, get Libra, spend them like dollars without big transaction fees or your real name attached, cash them out whenever you want. Feel free to stop reading and share this article if that’s all you care about. But the underlying technology, the association that governs it, the wallets you’ll use and the way payments work all have a huge amount of fascinating detail to them. Facebook has released more than 100 pages of documentation on Libra and Calibra, and we’ve pulled out the most important facts. Let’s dive in.
The Libra Association — crypto’s new oligarchy
Facebook knew people wouldn’t trust it to wholly steer the cryptocurrency they use, and it also wanted help to spur adoption. So the social network recruited the founding members of the Libra Association, a not-for-profit which oversees the development of the token, the reserve of real-world assets that gives it value and the governance rules of the blockchain. “If we were controlling it, very few people would want to jump on and make it theirs,” says Marcus.
Each founding member paid a minimum of $10 million to join and optionally become a validator node operator (more on that later), gain one vote 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 into which users pay fiat currency to receive Libra.
The 28 soon-to-be founding members of the association and their industries, previously reported by The Block’s Frank Chaparro, include: The 28 soon-to-be founding members of the association and their industries, previously reported by The Block’s Frank Chaparro, include:Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.
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. The Libra Association is based in Geneva, Switzerland and will meet biannually. The country was chosen for its neutral status and strong support for financial innovation including blockchain technology.
