Libra was all started in May 2018, when it was revealed that Facebook is establishing a blockchain division which would run under the charge of David Marcus, vice president of messaging products at facebook, where he heads the Facebook messenger unit.
Libra is a permissioned blockchain digital currency proposed by the American social media company Facebook. The currency and network do not yet exist, and only rudimentary experimental code has been released. According to the Libra Whitepaper, “Libra is a simple global currency and financial infrastructure that empowers billions of people.”
The project has faced a series of challenges recently. Members of Congress raised concerns about whether currency could be used for money laundering, disrupt the global financial system, or give Facebook too much control over data, which a normal person too could think of.
“When you came up with this idea and went to your board of directors, how did you tell them that Facebook could monetize or profit from the creation or use of Libra and Calibra?
a congressman asked Zuckerberg.
“Well, Congressman, you may not believe this, but that’s actually not the first thing that we talk about at the company,” and also added, “We focus on building services that are going to create value in people’s lives, and we believe that if we do that, that we’re eventually able to get some of the value downstream.”
Mr Zuckerberg also gave a token of reassurance to the US lawmakers about the safety of his proposed digital currency but was given short shrift by most.
Facebook has built it’s own digital wallet called “Calibra” which will be used to communicate with Libra. Users will be able to send Libra via their smartphones by using Calibra. People can also turn their US dollars into Libra for their Calibra digital wallet, by going to local or online currency exchanges.
Libra is baged by a basket of financial assets (Libra Reserve) provided by node operators. In it’s initial release scheduled for 2020, libra will be backed by assets denominated for four fiat currencies: USD, EUR, JPY, and GBP.
So far, Facebook’s planned cryptocurrency, which launched in 2019, has been plagued with regulatory concerns from international lawmakers, wary financial partners in the US, and looming competition from China.
“But in order for that to happen, we have to build a system that passes all the regulatory approvals, it has to be useful for people, if all that plays out then we may see a positive business impact,” Zuckerberg finished.
Libra will be incorporated into the facebook ecosystem in 2020 as the launch is planned. Yet, in the medium-long term, this initiative is expected to have a significant impact on both local and global markets, with significant implications on the crypto asset, financial and economic landscape.