The revolution has begun. Mark Zuckerberg has lifted the veil on cryptocurrency of Facebook: it’s called Libra and will be launched in 2020. A virtual currency that aspires, in the intentions of the founder of the social, to “make it easier for everyone to send and receive money just like using our app to instantly share messages and photos”.
How Libra works
But how will this virtual currency work? Zuckerberg also announced the independent subsidiary Calibra, which will provide services to send, spend and store Libra. The services will start with a digital wallet that will be available on WhatsApp, Messenger and as an app in its own right. “From now on it will allow Libra to be sent to anyone with a smartphone”, free or low cost, he wrote, stating that “Calibra will be regulated as other payment service providers”.
The Libra Association
The project also provides for the creation of a Libra Association “an independent non-profit organization” which already has 28 members and should reach a hundred for the launch. In the field there are big coem payments Visa, PayPal and Mastercard but also tlc operators like Vodafone and Iliad, and then eBay, Uber, Bookinh Holding. It is designed to facilitate Libra operations, to manage the reserve that maintains the value of the currency stable and to coordinate the agreements between its stakeholders. Each of the members of the association maintains a node of the Libra network and elects a representative on the council of the association, which takes decisions by vote. Each founding member cannot hold more than one vote or 1% of the total votes, to prevent any member from taking excessive control over the network. Legalante, the foundation will be to ‘coin money’.
A decentralized blockchain
In short, a decentralized blockchain but very far from the philosophy behind Bitcoin, more democratic and at the same time unpredictable. However, the Libra operation will attract the attention of large institutional and private operators in the blockchain world. The problem, in fact, so far has always been that of the lack of confidence that has slowed down the throwing into the adventure of crypto-currencies. Imagine after the price collapses that hit Bitcoin and its sisters this year (even if the value is now back above 9 thousand dollars). Libra will be a sort of ‘stable coin‘, a more stable virtual currency because its value is anchored to a traditional currency (like the dollar) or to other goods. It is not yet clear exactly what Libra’s ‘basket’ will be but certainly there will be a dollar. The security of payments will be guaranteed (as for the cryptocurrencies) also by an encryption system.
“Mobile money” increases security and “this is particularly important for people who do not have access to traditional banks”: “there are about a billion people who do not have a bank account but have a mobile phone”. The Colossus of Zuckerberg is currently enabling and organizing the structure. But the loot is much bigger. Facebook plays its future and the world of payments is a global affair. He wants much more than entering our lives. It could soon become a new supranational monetary system. With the difference that you will not need a bank or a current account, but only a smartphone and an Internet connection. “Over time we hope – reveals the same Zuckerberg – to offer more services to people and businesses, such as paying bills with a button, buying coffee by scanning a code or using local public transport without having to bring cash or a card”.
Facebook starts with a pool of 2.4 billion monthly active users on the platform. Increased exponentially by the founding partners of the platform. It could be a revolution with the risk of strong repercussions on the traditional financial and monetary system. We’ll see. The future is already here.