19 Jun 2019 Samantha McLauren
How ‘Libra’ Cryptocurrency Would Work For You
The leader in social media platforms, Facebook, alongside 27 partners, such as Uber, Stripe, Vusa, Vodafone, PayPal, and eBay, announced the launch of their stablecoin project, called Libra. Libra’s primary goal is to open up new opportunities and access to financial services worldwide.
Libra’s core principle is to allow users to send and receive cash instantly, with little to no transaction fees. The Libra coins will be available worldwide.
Over the past year, Facebook’s HR department was on the lookout for IT specialists and software developers to help conclude the project. The global release is set for 2020, but possible obstacles on the way to 2020 may delay or put on hold the deployment.
Libra’s working mechanisms don’t differ much from other cryptocurrencies – users will have access to a wallet, in which they can store and spend their coins. The main difference is that Libra will be fiat-backed, ensuring that the new currency would not suffer from volatility issues. Every time users purchase Libra, their fiat or crypto cash is deposited into a bank account, ensuring the fiat-backing.
Also, Libra’s protocol does not need to use miners, which were at the crosshairs of environmentalists over the past several years, due to the amount of electricity they consume.
Facebook is also developing its own wallet service, called Calibra. In the service, users can purchase, send, or withdraw Libra and convert the stablecoin into fiat and then deposit it into a bank account or a PayPal account.
Facebook hopes partners such as UBER and Spotify will integrate the new payment system into their services, allowing users to order a ride or pay for streaming of audio content directly with Libra.
Although Facebook’s plans are ambitious, a wave of criticism is blasting towards the social media giant. The key thesis of the critics – the privacy concerns and how Facebook could guarantee the security of their transactions.
Facebook’s CEO Mark Zuckerberg and the privacy team are making steps into securing the information, but their actions could cause a drop in the ad revenue from not delivering specific ads to its customers.
Facebook is one of the few global giants to jump on the crypto bandwagon. The team’s effort to revolutionize the way users interact with money is a bold task that is hiding a certain risk. However, Facebook hopes that before the global launch of Libra, over 100 companies will enter into a partnership, allowing Facebook to revolutionaize the way global payments are being placed.