Finally, Facebook’s Libra is officially launched despite objections from US government. Read on to know more about it…
Finally, Facebook’s Libra is officially launched despite objections from US government. Facebook has confirmed that it will press ahead with its plans for the digital currency. The Libra Association, the non-profit group that will commit to launching and using the currency and govern the currency, officially signed 21 charter members at the organisation’s inaugural meeting in Geneva. The announcement by Facebook marks a sea change for Libra’s development which faced several obstacles.
About Libra
Libra is the name of the new cryptocurrency Facebook is backing which will launch in 2020, and once in circulation will be used to buy service digitally from a user’s smartphone. The digital currency will be stored in a digital wallet called Calibra, a standalone app on a user’s smartphone or housed within Facebook-owned services such as WhatsApp and Messenger.
The two biggest issues for cryptocurrency so far, Facebook argues, have been scalability and volatility. However, Libra is to be backed by a reserve of assets – including linking it to several international currencies – from a number of central banks in order to keep its pricing stable.
Group Inclusions & Exclusions
A group of 21 members have signed a charter to join the Libra Association — originally the association had 27 potential members, but five major payments providers have dropped out recently, including Visa, Mastercard and PayPal. Most of the remaining members of the Libra Association consist of venture capital firms and non-profits. These companies had been tipped as some of the main supporters of the technology, but withdrew their support amid backlash from governments in Europe. However, Facebook presses ahead with Libra digital currency despite the defections. Uber, Lyft, Spotify and Vodafone have jumped on board with the currency before the online money is expected to become publicly available next year.
The Libra Association said in a statement that an unnamed additional 180 entities have expressed interest and have met the initial requirements to join.
Past Criticisms
In the past, Facebook has faced criticisms since the summer when it unveiled the plans to create its separate, private currency system to allow users to make cross-border payments more easily.
The French government said last month that it would block the use of Libra in Europe because it threatened the ‘sovereignty’ of the euro. Speaking at a conference in September, economy and finance minister Bruno Le Maire said: ‘We cannot authorise the development of Libra on European soil.’
Politicians have said Facebook’s struggles with protecting users’ privacy would spill over into Libra despite it being a separate organization. However, Facebook tried to answer those criticisms by creating Libra as a legally separate entity through the Libra Association. Facebook CEO Mark Zuckerberg is scheduled to appear in front of the House of Representatives Financial Services Committee later this month to discuss Libra. The committee is chaired by Maxine Waters, who has been a critic of Libra from the outset. Facebook and the Libra Association have said they would not start trading or accepting deposits for Libra until they satisfy U.S. regulators concerns.
