Libra is the cryptocurrency, or virtual currency, of leading social media platform Facebook. The aim is for Libra to become a global currency which billions of people around the world can make use of, especially those living in countries where access to financial services and banks is limited.
Facebook, which was founded by Mark Zuckerberg, who currently serves as the company’s CEO, is teaming up with other recognized figures from Silicon Valley who are entirely in support of the strategy. The Libra Association is responsible for governing Libra, with this organization featuring 28 members which include the likes of Visa, Mastercard and PayPal.
Libra, as a cryptocurrency, will run on a blockchain, which is the method of choice for other cryptos such as Bitcoin. A blockchain is a record of unalterable transactions. With a blockchain being decentralized, this removes the need for financial organizations to be involved, and the government won’t be able to interfere either. This is one of the main reasons why there is a growing demand for cryptocurrencies on a global scale, with companies like Luno offering a bitcoin wallet which is being used in more than 40 countries.
However, there are some who have concerns about Libra, which centers around the fact that even though it is decentralized, it’s not decentralized in the same way as the likes of Bitcoin. While everyone can get involved when it comes to processing transactions on the Bitcoin blockchain. This isn’t the case with Libra, as only members of the Libra Association can take part. However, with no individual company able to have a say, the collective effort should help Libra stick to the blockchain ethos.
Anyone who has paid even slight attention to cryptocurrencies since they made their name in the mainstream several years ago will know that prices can be volatile. Of course, this is a concern to many, with Facebook having close to 2.5 billion users. Therefore, Libra will be what is known as a stable-coin, to allay any fears in terms of price volatility.
Libra’s price will be linked to the value of assets in the real world, and this will help to determine price increases and decreases. When cash is traded for Libra by users through an exchange, the money they have used will go into to the Libra Association reserves, which will be made up of the great British pounds, dollars and euros.
Libra, when it’s entirely up and running, will be tradable between users through Facebook Messenger, WhatsApp and a bespoke Libra app which is set to be released. As far as businesses who will accept Libra are concerned, those who are a part of the Libra Association will likely allow it to be used to complete payments for products and services.
With the likes of Uber, Spotify and eBay being members of the association, it will open a world of possibilities if they were all to embrace Libra. It would also enable the Facebook-owned cryptocurrency to hit the mainstream market immediately, which would see its popularity surge from the outset. Libra could go on to change the world where financial transactions are concerned, especially in countries where traditional banking methods aren’t accessible as they should be.