After months of speculations and rumors, Facebook has finally unveiled its cryptocurrency Libra and its blockchain network Libra Foundation. Libra is a stablecoin backed by bank deposits and government securities. The digital asset will be publicly launched in the first half of 2020.
The reserves backing the stablecoin will be held by a custodian board, which includes VISA, Andreessen Horowitz, Uber, and Facebook. All of the custodians have invested $10 million apiece in the project operations. The board will also oversee the management and development of the tokens underlying blockchain Libra Foundation, and developer platform.
In its official release, Facebook says that the cryptocurrency is targeted towards the $1.7 billion people across the globe, who don’t have access to banking facilities. To achieve its goal, the social media giant will launch Calibra, a Libra based payment application, which would be compatible with WhatsApp and Messenger.
Given the user base of Facebook, Libra’s launch could just be the biggest event in the decade long history of cryptocurrencies, after the advent of Bitcoin itself. The move could trigger a large scale adoption spree, especially at a time when global payments are increasing by the day. Moreover, the organizations backing the stablecoin are leaders of their respective industries.
In its White Paper, Facebook stated that it wants to make banking services more accessible to the underprivileged communities around the world. It said,
All over the world, people with less money pay more for financial services. Hard-earned income is eroded by fees, from remittances and wire costs to overdraft and ATM charges. Payday loans can charge annualized interest rates of 400 percent or more, and finance charges can be as high as $30 just to borrow $100.
Before the official launch next year, Facebook aims to bring about 100 founding partners, which will give the users access to various services and products via the Libra platform.