Todd Bishop
Facebook announced on Tuesday (18th) that it will launch its exclusive virtual currency “Libra” in 2020 to develop global e-commerce and payment services. Unlike other current cryptocurrencies, Libra will operate through non-profit organizations based in Switzerland, and each stakeholder will receive “voting rights” to determine where the currency will go in the future.
Libra uses the same blockchain technology as Bitcoin and Ethereum, and Libra’s price is relatively stable.
It is backed by low-risk real assets such as national central bank cash and government bonds. Holders should receive a “high guarantee” to convert Libra to traditional currency at the exchange rate.
28 founding members form the association Switzerland as the base
Libra is operated by a non-profit organization. The Libra Association, a 28-member member of the payment company Mastercard, Visa, PayPal, eBay and Spotify, and Silicon Valley investment company Andreessen Horowitz, will be based in Switzerland. Geneva is the headquarters and is responsible for related business.
The association will have the authority to determine Libra’s board of directors and to assume a supervisory role. To join the association, each founding member is required to purchase a Libra investment token and invest at least $10 million in the network; one vote for every $10 million, and a limit on the number of votes. Facebook expects the membership to grow to 100, and mentions that the company will withdraw from leading Libra’s role by the end of 2019. The technology website TechCrunch described the association as “a new oligarch of virtual currency.”
Wallet Calibra can be linked to a bank account
In line with the launch of Libra, Facebook has also established a subsidiary company “Calibra” to ensure “social separation of social data and financial data” on the one hand, and Facebook’s role in Libra business on the other hand.
Calibra plans to launch the same-name e-wallet, allowing individual users and merchants to transfer and store Libra currency. Calibra management expects customers to use the wallet service through an application on iOS and Android, or through a Facebook account linked to Facebook’s Messenger and WhatsApp. For those who do not have a hukou, you can also go to a change shop or convenience store to redeem Libra.
Dante Disparte, head of policy and communications at the Libra Association, said the plan could allow more than 1 billion “no bank accounts” worldwide to trade and use financial services over the Internet.
