Today Facebook released long-awaited details about its blockchain venture Project Libra. It confirmed the cryptocurrency to launch in 2020 will be backed by a basket of currencies and government securities to enable stability. It has built a new open source smart contract language and blockchain protocol. The blockchain will initially be permissioned with plans to become permissionless. Twenty-seven brands have signed up to run nodes on the network and are rumored to have invested $10 million each.
A whitepaper was released with a new Libra Association dedicated website. There are two organizations involved. One is Libra Networks based in Geneva which will run the blockchain. Separately, for any solutions that Facebook itself plans to deploy, it has incorporated a subsidiary Calibra.
Previously known as GlobalCoin, Facebook’s blockchain based token Libra has been created to address the lack of global financial services. Today’s release claims that 1.7 billion adults don’t have an active bank account. Meanwhile, Facebook’s colossal user base could be the perfect way to give many people access to low cost, fast, and secure money transfer.“Libra will bring more inclusive financial services to billions of people,” reads a statement on the Libra website.
However, Libra could also be a considerable disruption to the mainstream banking sector.
The subsidiary’s first project will be a digital wallet integrated into Messenger and Whatsapp, plus an app of its own. Upon release, slated for 2020, the wallet will allow the transfer of Libra between smartphones. The announcement claims this transfer will be as easy as sending a text message.
With such an extensive reach, a digital wallet built into these messaging apps is unprecedented and could bring blockchain based money transfer to the mass market. Indeed, partner Coinbase stated: “Libra Association may drive massive global awareness to crypto.”
Libra Networks is no small start-up trying to break into the blockchain savvy market. Headed by former PayPal boss, David Marcus, the subsidiary has an impressive partner list. Today investors were announced such as MasterCard, Coinbase, Vodafone, Thrive Capital, Andreessen Horowitz, and unsurprisingly eBay and Paypal. The latter firm said: “PayPal aims to democratize financial access – Libra could contribute to that goal.”
Each Libra partner runs a validator node on the Libra Blockchain, and contributes in decision making.
Facebook also outlined its future plans for the network. The firm hopes to provide services to businesses, such as paying commercial bills, and additional facilities to the mass market, like using Libra to buy coffee or pay for public transport.
It seems that conjecture over the project being e-payment related was correct. Indeed, Facebook has met with the US Treasury, Visa, Mastercard, and Western Union in the last few months. CEO Mark Zuckerberg more recently had a meeting with the Bank of England.
The full list of Libra partners can be seen below:
Internet and e-commerce:
- Mercado Pago
- Andreessen Horowitz
- Union Square Ventures
- Ribbit Capital
- Thrive Capital
- Creative Destruction Lab
- Facebook (Calibra)
- Booking Holdings
- Women’s World Banking
- Mercy Corps
Image credit: Facebook