Since past decades, Facebook had been planning to form a new global currency, after a decade Bitcoin was introduced over the world. So, recently the currency is revealed by Facebook is “Libra” culmination of more than a year’s worth as well as being administered. Since few months, Rumors have been whirling about crypto-currency of Facebook but on Tuesday, Facebook has proclaimed that it’s highly anticipated crypto-currency Libra will now onwards run on a Blockchain network which is tenable by 100 distributed computer nodes and servers at launch. The Libra Blockchain will come into existence in 2020 by leading the crypto currency’s ongoing development. Elsewhere in this launched, Facebook famed how it intends to work alongside the existing financial system.
What is Libra?
The CEO of the Facebook, Mark Zuckerberg has disclosed a white-paper highlighting the technical details of with planning to launch their digital currency next year. This sort is called “Libra” considered as the biggest move that is come from two years of intense investigation with the impact of poor privacy practices and foreign interference. The trendy digital token will work on work on Blockchain framework and not only be used to transfer funds instantly via Facebook but also for making online purchasing from websites like — Booking.com and eBay. Moreover, the fees will be lower in comparison with standard banks and credit card services. Facebook wishes that Libra will appeal its 1.7 billion adults who don’t have access to any traditional bank as well as individuals who cannot be paired by explosive local currencies in their home countries. Its plan is to make Libra as a “Global Coin” pegging it to a well-known currency like — British Pound and US Dollar. Moving ahead, initially, Libra will be controlled by certain world’s largest companies who would gain profit directly by the use of this virtual currency. Likely, it will be incorporated into financial structures via VISA, MasterCard, and PayPal.
Backing from big financial groups
Mark Zuckerberg also said that Libra isn’t meant to defy laws or rules of government since the value of the cryptocurrency linked with the value of sovereign currencies it is backed by. It has over-viewed that Facebook is taking its crypto-currency, very seriously. So far, it has ensured deals with 28 e-commerce, tech, financial institutions as well as venture investors. It includes — eBay, PayPal, Spotify, Uber, and Vodafone; accusing from each $10m (£8m) in exchange of joining an independent body called as Libra Association located in Switzerland and governs digital tokens. This pace encourages or builds up trust in the payment system of financial regulators or users who’ve been vastly scrutinizing Facebook for its power and somewhere lack of responsibility as well.
It is also revealed that Payments will make through Libra, fortunately, be accepted by all founding group members. In other words, from 2020 it could be possible for us to pay for Uber rides via Digital currency or Crypto-currency. You too might be allowed to make payments of any mobile phone contract or subscriptions of Spotify through Libra. Hence, the result would render a currency to people that’s available anywhere across the world. Although, the engrossment of multinational financial institutions like MasterCard and Visa seem shocking at first sight because before this crypto-currencies are typically seen as a cheaper alternative for such payment options. So, the involvement could be an effort to track Facebook’s currency and have their slice of the pie should the currency take off with Facebook’s 2.38 billion monthly active users. Crypto purists argue that defeats the purpose of blockchain, which relies on that expensive computation so the system doesn’t need a tribunal of trusted gatekeepers.
Money, Justice, Freedom
Three reasons for choosing such name — Libra, it is an astrological symbol depicting the scales of justice, an antique Roman unit of measure and the phonetic semblance to the French word “libre” means free. Hence, we can say that the amalgamation of justice, money, and freedom describes — Facebook. Initiatives to live up lofty values, this will not only attain powerful partners but also open for grassroots developers in all places that obtain a web signal. There are some precautions to be followed –
Facebook’s own serious rivals of Calibri Wallet have to be managed. Promises have made related to security and privacy must be accomplished anyhow as well as the association needs to prove that it can act independently of its corporate creator. Central bankers and authorities have been still phlegmatic now towards crypto assets, which have persisted a niche class. Most of the economist saying that Libra will bring a range of financial crimes, likewise — from hacking to tax evasion. But, money laundering is still at the top of the list; although to overcome with this Facebook may somehow apply some obligations for the use of Crypto exchanges and wallet providers.
Use of Libra in the Indian Market
In Indian Market, Facebook’s newly introduced crypto-currency wouldn’t be available in India cause of current ban of blockchain based currency transition. In 2018, RBI had issued regulated entities for the three-month deadline in order to stop dealing of virtual currencies cause of its associated risks. Although, Facebook is taking advantage of emerging markets of Asia including India the government appears to deny the use of digital currency, i.e. Libra. Under the Indian IT Act, Section 79 Facebook is responsible for taking all due care to ensure that its platform is not used for any kind of illegal activity. Even the section will apply on Facebook as its base is out of India. Establishment of such laws is a trial to kill cryptocurrencies within the Nation with a lot of zeal.
All is Facebook wants to leverage its colossal balance of users by offering them an easiest or fastest way to send money to relatives or friends. In India, the market of payments being sent home is the largest one over the world. At present, the key concern for Facebook is stability since then it is appealing for emerging nations with a volatile local currency. Therefore, to ensure the stability of its crypto-currency, Libra will be backed with a securely stored basket of matching traditional currencies. It is set to underpin the Libra to stop it suffering or may be benefiting from the wild value vacillate which we’ve seen in Bitcoin.
Facebook’s Libra Coin: Everything You Should Know About It was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.