Libra - A New Global Currency By Facebook

Facebook and its closest partners seem to think that they are large and powerful enough to swing a coup against the concept of government control of money. Libra directly states that its intent is “to shape a regulatory environment”

- Rajendra Awasthi

With cryptocurrencies having taken the global markets by storm, it is only time before we see many heavyweight players entering the digital currency space. One such player is the social media giant Facebook, which will soon launch a global cryptocurrency “Libra” by the first half of 2020—in honour of an ancient Roman unit of mass. Per Facebook, Libra will be “a stable global cryptocurrency built on a secure network” and will be fully backed by a reserve of real assets—a basket of currencies and assets. In addition, Facebook will be incorporating a subsidiary digital wallet firm “Calibra” that will be connected to other applications such as Messenger and WhatsApp and offer the users a medium to transact in Libra

A Shadow Bank

As proposed, both the Libra currency and its reserves will be governed by an independent association comprising of diverse and independent members headquartered in Geneva. This governing entity will be made up of representatives from an initial group of 28 companies including Mastercard, Visa, Stripe, Paypal, eBay, Uber, Vodafone, Coinbase, Thrive Capital, etc. Additionally, it will also launch the Libra token which will be a foreign exchange derivative, synthesized from a basket of national currencies. Eventually, Libra wants to operate as a shadow bank, issuing Libra-denominated liabilities that are explicitly intended to function as money.