After a year of lull, Facebook has now declared that it will be launching its crypto currency, Libra in January 2021.
As per a report citing officials of Facebook working on the crypto currency project said that digital coin will be issued by Geneva-based Libra association and regulating as Libra.
Libra is a permission Blockchain, where transactions are validated by a consortium of giant corporate companies lead by Facebook, called the Libra Association. Each member runs a node in the network.
Facebook has to scale down its plan to launch Libra ways back in June 2019, where it has said that people will use Libra for transactional purposes than for an appreciation in value. The main motive of Libra is financial inclusion or the efforts to bank the unbanked.
After the announcement of launching its own digital currency, concerns by central banks were raised worldwide, expressing that the issuance of digital currency will cause financial instability and create challenges for traditional money.
Explaining the importance of Libra, the company said that there are over 1.7 billion adults who don’t have access to financial services, bank account despite having a smartphone. The introduction of Libra will help these people to use various financial services. It can help in the development of the developing countries along with creating a global marketplace.
Understanding Libra association
Including Facebook, there were 27 members supporting the Libra association. Several notable projects stepped back from assisting this project, including eBay, Vodafone, PayPal, and Mastercard.
The Libra association has now sought permission from the Swiss market watchdog to launch a range of stablecoins backed by individual fiats alongside a token based on the currency-pegged stablecoins.
Facebook has already planned to integrate Libra to its Messenger and WhatsApp. After its launch, people can make transactions from various products of Facebook. It is hoping that libra can bring 90 million small businesses on the Facebook platform, under an umbrella.
Libra, a independent entity
In May, Facebook appointed HSBC legal chief and former George W Bush-era terrorism finance tsar Stuart Levey was appointed as its first chief executive to show that Libra Association as an autonomous organization, separate from Facebook.
Facebook has also announced that Libra will not be managed by the social media agent and its Blockchain will be controlled by the Libra Association where Facebook has equal rights as other members.
The social media giant wants to create a global currency itself and lead the Blockchain and cryptocurrency buzz which is seen as a disruption to the current financial system. By integration of platforms, Facebook might also be aiming to create an all in all platform which can cater to all sorts of user needs.