The market for cryptocurrencies started with the launch of Bitcoin in 2009, and since then, so many cryptocurrencies have been launched that it gets hard to keep track of them. The crypto market has seen massive growth in the past 3-4 years as it started gaining attention from mass media, which helped in this boom.
From the past 2-3 years, several new cryptocurrency projects were launching in the market. Amid all this, the social media giant – Facebook announced the launch of their cryptocurrency platform, and this news got viral like wildfire. The announcement came forward in June, and the upcoming cryptocurrency is known as Libra, and it’ll come with its dedicated wallet called Calibra.
What is Libra?
Libra is a permissioned blockchain-based digital currency which is being developed under the supervision of Facebook’s vice president, David A. Marcus. The cryptocurrency is under development in partnership with an independent, non-profit member Libra Association. Facebook is the second member of the project, and these companies aim to use Facebook’s user base for the promotion of the digital currency when it is launched. The transactions and the cryptocurrency will be managed and cryptographically entrusted by the Libra Association.
Note: Libra Association was established by Facebook to look after the cryptocurrency and the transactions, and it was founded in Geneva, Switzerland.
The development of the cryptocurrency and a blockchain network started back in 2017, and Morgan Beller was the only person working in this direction. Soon he was joined by David Marcus, and by February 2019, about 50 people working in the course of development of this project. The development of Calibra is taking place under the supervision of Kevin Weil, and he is listed as the creator of the coin and the VP of Product for Calibra. The other creators of the currency are Morgan Beller and David Marcus.
The idea behind Libra is:
- support from big firms gives coin intrinsic value
- service for consumers to transfer money quickly and free
- give over 2 billion people access to digital currency
The “HULK” Support
Libra Association is a Geneva-based non-profit organization that is among the major partners for the project with Facebook. At the time of announcement, the project was backed up by some big names from the industry like Facebook, PayPal, Mastercard, PayU, Coinbase, Spotify, eBay, Uber, etc. Several venture capitals and non-profit organizations are also part of the project.
With support from such big names from the industry, Libra is sure to grab some attention from the users as an emerging cryptocurrency platform. All the companies involved in the project are big established firms from their respective fields. However, most of the companies have clarified that they haven’t joined officially, and they will only participate once the platform clears all the regulatory requirements. Libra Association is planning to let the memberships increase and aim for 100 members in the market.
Difference between Libra and Other Cryptocurrencies
Libra is no different from other cryptocurrencies (like Bitcoin, Ethereum, Tron, Xrp, Litecoin etc) as just like them; Libra is also a digital currency that would be available on a network and has no physical presence in the system. The transactions that would take place on the platform will be stored on a blockchain. In the initial stages, the blockchain will be managed by the founding members, and with time, it will turn into an open system.
The crypto market is well-known for its volatility and the fluctuations that take place in the charts and prices of the cryptocurrencies. The reason behind these trends is that the cryptocurrencies are not backed up by any institution, which leads to wild patterns in the charts. In this matter, Libra won’t face many problems as the cryptocurrency is backed up by over 20 companies.
Is the road to Libra coming to a dead end due to governments?
Libra was announced in June, and since the announcement, the crypto project is facing troubles from the authorities and governments on a global level. The announcement grabbed the attention of the U.S. Regulating authorities, and the development of the project paused while the governments began questioning about the working and aims behind the project.
Note: Facebook’s association with the name is causing most of the troubles as earlier, Facebook failed to protect its user’s data from a data breach.
The association of Facebook with the project has caused problems for the launch as the companies associated as the authorities are also questioning the members. They have even suggested some major companies back out from the membership as the odds are that the crypto project won’t get a green signal from the board for a few months.
However, there are several countries like Kenya, Zimbabwe, etc., where more than 70%-90% of people are using cryptocurrencies like M-Pesa and Ecocash money systems. Australia is among the few countries that accept Bitcoin as a form of payment for everything. The reason behind this backlash from the governments is that they have concerns regarding the cryptocurrencies and their working.
Bruno Le Maire, the Minister of Economy and Finance, and suggested that the project will not be launched in Europe as it might cause harm to the financial market of the country. The U.S. Treasury has advised the cryptocurrency platforms to make anti-money laundering measures a part of the internal design. As the government regulatory bodies took strict decisions related to Libra, the project lost support from Mastercard, Visa, PayPal, and other firms as they wanted to stay away from the chaos.
Is Libra an asset for the crypto market or a liability?
Recently, a meeting took place in which David Marcus addressed the SEC, the U.S. regulators and officials from 25 central banks from the world to answer their questions and help them understand the platform in a better way. David explained how Libra could help every person have access to currencies and how it can act as an asset for the crypto market.
It would be safe to say that Facebook is desperate to launch the project as they are even willing to work with the regulators and follow the regulations and rules issued by the authorities. However, it can be a problem as there are some major countries where the cryptocurrencies are banned, for example, India.
With a user-base of 251 million, India is the biggest market for Facebook, but unfortunately, cryptocurrencies are banned in India. This can cause issues for the cryptocurrency as it will lose its biggest market. The Libra team is trying its best to convince the government to give them a chance as their statements are covered by various news aggregators from all over the world. They believe that Libra can also help the government meet its goals of sustainable development, like eliminating poverty and gender equality.
Libra is motivated and determined to change the face of payment procedures across the globe and make the blockchain-based project the leaders of payments. The Libra project is discussed openly, and several media platforms and news aggregators cover the latest updates. However, Facebook’s association with the project also questions the credibility of the project due to it’s corrupted reputation in the past.
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