In a bid to shake up the world’s banking system, Facebook has recently unveiled a cryptocurrency called Libra allowing its billions of users to make financial transactions across the globe.
Libra will be administered by a non-profit known as the Libra Association based in Geneva, Switzerland with 27 founding members including Uber, Spotify, Mastercard, Paypal, and Andreessen Horowitz. The association will promote an open-sourced Libra Blockchain and developer platform with its own programming language, plus sign up businesses to accept Libra for payment including giving customer discounts/rewards.It is expected to launch in the first half of 2020.
With all these developments, how will Libra cryptocurrency change our lives?
With a goal to foster better, cheaper, and open financial services, Facebook finally revealed the details of its crytocurrency Libra. The social media giant won’t fully control Libra. It will be governed by a non-profit Libra Association based in Geneva, Switzerland with 27 founding members including Visa, Spotify, Uber and Andreessen Horowitz. It is expected to launch in the first half of 2020.
Will Libra cryptocurrency change our lives?
Libra is a unit of the Libra cryptocurrency named after the Roman unit of measurement for coins. It is represented by a three wavy horizontal line unicode character ≋ just as dollar is represented by $.
Providing an alternative to cash, credit cards and bank transfers, Libra will differ from other major cryptocurrencies such as Bitcoin in being backed by a group of currencies including the pound(£) and the dollar($), thus making it far less volatile.
Its value is tied to a basket of bank deposits and short-term government securities. Moreover, it is built on a secure, scalable, and reliable blockchain.
Lisa Ellis, an analyst at Moffett Nathanson Research says, Libra has the potential to be “highly” successful. “Payments is foundational to doing commerce,” she said, “and this would be a significant step toward enabling that.”
With these developments going underway, how will Libra cryptocurrency change our lives?
Simple global currency and financial infrastructure.
Wanting to make Libra the evolution of PayPal, Facebook is hoping to make the said cyptocurrency simpler to set up.
In its Libra documentation, Facebook writes:
“Success will mean that a person working abroad has a fast and simple way to send money to family back home, and a college student can pay their rent as easily as they can buy a coffee… …That would be a big improvement on today, when you’re stuck paying rent in insecure checks while exploitative remittance services charge an average of 7% to send money abroad, taking $50 billion from users annually. Libra could also power tiny micro-transactions worth just a few cents that are infeasible with credit card fees attached, or replace your pre-paid transit pass.”
Financial opportunities for those lacking access to financial platforms.
Libra might be a great opportunity for those people who are unbanked and underbanked. It is bringing an entire generation of people into a more formal financial system. And also it helps them build their credit and move up the socioeconomic ladder.
In a released white paper, the Libra Association said:
“The advent of the internet and mobile broadband has empowered billions of people globally to have access to the world’s knowledge and information, high-fidelity communication, and a wide range of lower-cost, more convenient services… …Despite this progress, large swaths of the world’s population are still left behind: 1.7bn adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone.”
Cryptocurrency for those with limited internet access.
One of the most common outcries about cryptocurrencies from the community has been, you need regular internet access to use bitcoin. The cost of using bitcoin in terms of phone data and miner fees often outweighs any benefits to actually using the currency.
This is where Facebook enters the picture.
Around the globe, Facebook has been the only way people can access the internet, and subsequently, any “non-cash-based financial system.”
With Libra’s introduction to the financing market, people will have free access to financial services on their phones everywhere.
Protection from unreliable currencies.
In the present, most people are forced to use their country’s fiat currency, even when that is a massive disadvantage to citizens.
Like the Argentinian peso for example, if Argentinians had put their life savings into bitcoin at its peak. Let’s just say way up over $20K USD, they would still have more money today than had they left it in the plummeting Argentinian peso.
With an increasing number of people taking advantage of the bitcoin over time, Libra will offer a wider audience refuge from inflation in a short term.
Facebook recently announced the launching of its envisioned cryptocurrency called Libra. The said digital currency will be under the supervision of a non-profit known as the Libra Association based in Geneva, Switzerland backed with its 27 founding members including Uber, Spotify, Mastercard, Paypal, and Andreessen Horowitz. It is expected to launch in the first half of 2020.
With all these developments, Libra has the potential to simplify the global currency and financial infrastructure, open great opportunities for those lacking access to financial platforms, make people have free access to financial services using only their phones everywhere, and offer a wider audience refuge from inflation.
By Tuan Nguyen