The social media behemoth Facebook has just released the white paper for its cryptocurrency and blockchain project. Facebook’s stablecoin will be called “Libra”, just like previous reports have indicated, and will operate on a native Libra blockchain.
Facebook releases crypto white paper for “Libra”
The white paper for Facebook’s cryptocurrency states that “Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people.” Although it remains to be seen whether it will be able to achieve that, it is nonetheless a notable addition to the cryptocurrency sector. Additionally, this Facebook cryptocurrency has been much anticipated.
The Libra cryptocurrency will be managed by a not-for-profit consortium based in Switzerland, called the Libra Association. This consortium will reduce Facebook’s control over the cryptocurrency.
The white paper outlines Libra and Facebook’s “plans for a new decentralized blockchain, a low-volatility cryptocurrency, and a smart contract platform that together aim to create a new opportunity for responsible financial services innovation.”
The Libra cryptocurrency will be backed by a bundle of reserve assets, designed to give the Libra crypto an “intrinsic value”. Furthermore, this will also serve to reduce volatility fluctuations. The Libra crypto will tie into a basket of bank deposits and short-term government securities. This Libra Association will store this basket in the Libra Reserve.
Libra blockchain will be “open and interoperable”
What’s more, Facebook highlights that the software underpinning its Libra blockchain will be open source. As such, it will be able to provide an “open and interoperable ecosystem” of financial services, which will be intentionally inclusive.
The white paper also recognizes the problems related to the existing financial services infrastructure. Such admission of the potential held by cryptocurrencies is especially notable, coming from a software giant like Facebook – which holds significant sway due to its size. The white paper notes
“Blockchains and cryptocurrencies have a number of unique properties that can potentially address some of the problems of accessibility and trustworthiness. These include distributed governance, which ensures that no single entity controls the network; open access, which allows anybody with an internet connection to participate; and security through cryptography, which protects the integrity of funds.”
Although this statement will come as no surprise to those following the cryptocurrency industry, it will likely boost public awareness. The sheer size and public recognition of Facebook mean that the message may well reach millions, if not billions, all over the world. Moreover, experts predict this will further validate the crypto industry.
Libra Association includes Uber, Spotify, PayPal, Coinbase, Andreessen Horowitz and more
As noted before, the Libra cryptocurrency and blockchain will be managed and governed by a consortium called the Libra Association. This confirms rumors that this consortium involves several notable actors.
The consortium will effectively reduce Facebook’s control over the Libra cryptocurrency and blockchain. What’s more, Facebook will only have governance equal to that of its peers within the Libra Association.
According to the white paper, the “Payments” companies in the Libra Association are Mastercard, PayPal, Stripe and Visa. “Technology” firms attached to the project include eBay, Lyft, Spotify, Uber, Booking, and more. “Venture Capital” companies include Union Square Ventures, Andreessen Horowitz, Ribbit Capital, Thrive Capital, and more.
As such, Facebook has teamed up with giants within many different industries. The Libra Association targets a launch during the first half of 2020, at which point it intends to have around 100 members. Furthermore, the white paper states that Libra will launch as a permissioned blockchain.
In addition to this, Facebook has also created Calibra, a regulated subsidiary which will manage Libra integration with Facebook and “ensure separation between social and financial data, and to build and operate services on [Facebook’s] behalf on top of the Libra network.”
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.