What we know about Libra, Facebook’s new cryptocurrency
Facebook has revealed last month it had been secretly developing its own cryptocurrency – Libra- for at least six months. Not much is known about this new coin. Rumour has it that Libra will be a new stable coin backed by a basket of multiple currencies to be used for purchases using Facebook channels.
What is known about Libra?
Last May 2, a new Limited Liability Company has been registered in Geneva, Switzerland called Libra Networks, being is stakeholder Facebook Global Holdings II LLC. His declared business description was:
“But: prestation de services dans les domaines de la finance et de la technologie, ainsi que le développement et la production de software et d’infrastructure y relatifs, en particulier en lien avec des activités d’investissement, l’opération de payements, le financement, la gestion d’identité, l’analyse de données, big data, blockchain et d’autres technologies (cf. statuts pour but complet). ”
Goal: Delivery of services in finance and technology, as well as the development and production of software and infrastructure and related activities, in particular dealing with investment activities, payments processing, financing, identity management, data analysis, big data, blockchain and other technologies”
Last May has seen also news related to Facebook hiring two employees in compliance areas, formerly working by CoinDesk, and end of May some news agencies were reporting Facebook’s new cryptocurrency referred to as GlobalCoin, and many investing websites started to publish articles about GlobalCoin and its uses, although nothing verifiable was known at the time.
CoinDesk in an article appearing on May, 29 said that PayPal president David Marcus was the head of the team in charge of the project, and will be designed to operate in the company’s current infrastructure: WhatsApp, Instagram, Facebook Messenger.
In that article is said, also, that what’s known about this new coin has been revealed by Laura McCracken, Facebook’s head of Financial Services and Payments Partnerships for North-Europe, to WirtsshaftsWhoche, a German business magazine.
In that article, Laura McCracken confirmed that Libra will not be tied to a single currency but, instead, backed by a basket of currencies to reduce its volatility. She also announced that its white paper will be published today, June 18.
On June 6 some CNBC reported ten names linked to this project. MIT’s Christian Catalini is the Chief Economist for the project, Sunita Parasuraman appears as the manager of the company leading the token project, the Switzerland-based Libra Networks. Also, some of the executives working on the Libra coin are based in Israel, as reported by CNBC.
Another interesting information is reported by Coindesk on Feb 4 about Facebook’s acquisition of the startup company Chainspace, who was developing a smart contracts platform. A month later the former Chanspace CEO, Harry Halpin, left to start a new “privacy-centred” project called Nym Technologies.
Community Reactions
Industry commentators have been divided on whether this new cryptocurrency will be positive or negative for the industry. The majority, though think it will be good for bitcoin and altcoins
Facebook's new crypto currency "Libra" is bad news for Bitcoin. Facebook will target the very market Bitcoin is counting on for growth, the unbanked in nations with high inflation. Libra will be stable, and much easier and cheaper to use as a medium of exchange than Bitcoin.
— Peter Schiff (@PeterSchiff) June 14, 2019
Crypto market rallying (again) ahead of Libra launch, marking a massive inflection point in global adoption of cryptocurrency. BTC > $10k by June 21st, marking start of Crypto Summer.
— Jeremy Allaire (@jerallaire) June 15, 2019
But there are also sharp comments regarding the privacy side of the Libra coin
Key distinction:
Facebook’s Libra is an incremental *evolutionary* build on the current payments system, one step further on the way to endgame WeChat financial surveillance.
Bitcoin is *revolutionary* — a completely new technological path that could preserve financial privacy. https://t.co/hVvn7GkWqQ
— Alex Gladstein (@gladstein) June 15, 2019
I cant believe there are people advocating Libracoin. These companies controll all of your data and now they will control your money too. It's the beginning of the social credit era in the west.
— Beastlorion (@Beastlyorion) June 15, 2019
Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook. https://t.co/C4FymDjtFw
— Sarah Jamie Lewis (@SarahJamieLewis) June 14, 2019
Latest developments
The Libra project has raised the red lights of the US Senate, as the US Senate Banking Committee seems to be concerned about this project. This committee wrote an open letter raising seven questions about regulatory, and privacy, financial information and records, information selling or sharing to other parties, creditworthiness data and eligibility management related to the Libra project.
Today Libra’s white paper will be released. Large players, such as Visa, MasterCard, eBay, Paypal, Uber, and Andreessen Horowitz is backing this coin. Here there is a list of companies said to be backing Libra as well.
FB shares have been bullish the last few days, as the white paper release website is finally open to the public. Facebook price is close to its all-time high.
More analysis to come…
