The 27-strong Libra Association said in April that it had planned to launch digital versions of several currencies, plus a “digital composite” of all of its coins. This followed concerns from regulators over its initial plan to create one synthetic coin backed by a basket of currencies. “Reporting that Facebook does not intend to offer the Libra currency in its Calibra wallet is entirely incorrect. Facebook remains fully committed to the project,” a Facebook spokesperson said in a statement given to The Verge, referencing The Information’s initial assertion that the company was no longer planning to support the Libra token in its digital wallet. The wallet will now support multiple currencies, of which Libra will be just one.
If Facebook does something that’s bad for the average Joe, the average Joe might up and leave the platform. I’m 100% certain Facebook will inevitably also serve the needs of corporate clients and banks. However, their gigantic user base will force them to keep the people’s needs at heart as well. It’s a numbers game for Facebook; they have to focus on the volume of FB users over time. At least banks pay you a minimum 0.25% interest on savings, while Libra takes your money and accrues 5–7% interest (large volume short-term money market) for them with your money while you have it on your Facebook account. Now, if you have a cryptocurrency that’s value comes from backing in the real world, then whoever controls that backing gets to choose the code rules.
Cryptocurrencies and derivative instruments based on cryptocurrencies are complex instruments and come with a high risk of losing money rapidly due to leverage and extreme asset volatility. You should carefully consider whether you fully understand how cryptocurrency trading works and whether you can afford to take the high risk of losing all your invested money. Congress and regulators continue to study all potential risks posed by the project. All concerns are about what impact it will have on the economy and the dollar’s stability. Authorities are interested in how the corporation will maintain confidentiality and protect users’ rights. However, the cryptocurrency wallet Novi, previously known as Calibra, is under development.
The whole thing was, frankly, fairly dense, and it’s been hard to tell how much if any of it would pan out in reality. Fears that it would pan out have clearly been effective in neutralizing some of the group’s aims, though. It’s not entirely clear what Diem will launch, whenever it does launch, but the group is trying to make it sound less menacing than the Facebook-controlled dollar replacement many initially saw it as. Read an in-depth guide on Alexandria, CoinMarketCap’s online educational resource. Levey was previously chief legal officer of global banking company HSBC, where he also sat on the executive committee.
Libra (LIBRA) Coin: Facebook’s Cryptocurrency.
Facebook anticipated at least some scrutiny, so it created a nonprofit, called the Libra Association, of which Facebook and its new Calibra subsidiary would represent only one member. That group, based out of Zurich, Switzerland, has been tasked with overseeing the cryptocurrency’s development, as well as the blockchain network that would support it. The currency was also to be supported by a pool of assets, including existing currencies from around the world, contributed by the various participating members, which at launch included big names like Mastercard, PayPal, Stripe, and Visa. However, several founding members have since left the association amid regulatory scrutiny, including PayPal and Mastercard. Facebook first unveiled plans for Libra in June 2019, part of an effort to expand beyond social networking into e-commerce and global payments. It said Libra, alongside partners like payment firms and credit card companies, would create a digital token backed by a wide mixture of currencies and short-term government debt.
The debut of Libra or whatever Facebook decides to call it could unlock a new era of commerce and payments for the social network. It could be used to offer low or no-fee payments between friends or remittance of earnings to familys from migrant workers abroad who are often gouged by money transfer services. Ironically, the failure of Libra/Diem also stemmed from the involvement of Facebook and other large regulated organizations. This actually gave governments, both US and foreign, and regulators an identifiable target to express concerns about money laundering, consumer privacy, capital control circumvention and other financial risks. The cryptocurrency was also NOT decentralized even though the white paper highlighted a plan to become decentralized.
Confirmation that Facebook intended a cryptocurrency first emerged in May 2019. It seems that its primary purpose is not for financial inclusion or efficiency gains, but rather as a part of its efforts to make the RMB a more significant international currency. China as well as some European officials also see the development of CBDCs as a means to reduce the dominance of the U.S. dollar in international payments. The Diem Association — a group Facebook spearheaded to launch the Diem stablecoin — said Monday it will sell its intellectual property and assets to the California bank Silvergate, a go-to firm for the crypto industry. The attention this will bring to the greater crypto community far outweighs the potential threat to it. What scares me is the power it will give Facebook over everyone who uses it.
The Association is focused on making the purchase and transfer of Libra as simple as possible. There are plans to integrate the wallet and cryptocurrency into Facebook and WhatsApp messenger. That day, Mark Zuckerberg wrote on his Facebook page that the company and 27 other organisations had united to create a new currency called Libra that would be scheduled for release in 2020. According to the plan, Libra would create an alternative to cash, credit cards and bank transfers. Interestingly, in his rather lengthy message, Zuckerberg never once called Libra a cryptocurrency. “Central banks … and Big Tech … alongside wider adoption of cryptocurrency, are building new payment formats and rails,” Citi analysts wrote.
Dollars earn interest, though at current rates that won’t add up to very much. The value of the Hong Kong dollar is pegged to the US dollar and managed by acurrency board, which can issue new notes only if it hasenough in reserves. It’s tempting now to declare this is the end of Facebook’s crypto ambitions, but that’s not right. It has gone all in on the metaverse, and the metaverse is widely seen these days as a crypto thing, even though that isn’t quite accurate. The concept of the metaverse dates back to the early 90s with Neal Stephenson’s Snow Crash,and metaverse games like “Second Life” and “Animal Crossing” were pre-crypto, but the rise of metaverse games that use blockchain and NFTs has blurred the lines. The association then announced in April that it was overhauling its vision to address regulators’ worries, limiting its scope and promising extra measures to police its system for abuse.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. For example, US Senator Elizabeth Warren believes that today’s major technological behemoths have too much power and prevent the new generation of IT companies from establishing a proper place in the industry.
The association, which comprises 26 financial firms and non-profits, said it was relocating its main operations from Switzerland to the United States and withdrawing its payment system license application with the Swiss financial regulator. A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. It ensures smooth interaction between members — the validation nodes network — by helping them expand, develop and promote the network.
And though it’s starting with a limited pilot, the group plans to eventually bring in merchants and other partners. “We are going to be phasing in different functionalities and use cases, applications in different areas,” he said, adding that members — both large and small — would have to undergo rigorous anti-money laundering checks. “A big step of our dialogue with regulators has been a phased approach to launch,” Christian Catalini, Diem’s chief economist, told CNBC’s Joumanna Bercetche last month.
The second change is enhanced compliance procedures to address concerns that the network could be used for money laundering and financing illicit activity. The revised proposal says some aspects of compliance will be built into the system itself and will be automated; it also sets forth diligence and screening procedures that were absent from the original proposal. The announcement caps a nearly three-year odyssey on the part of Facebook and its partners to launch a digital currency. Where great forces too big for their own good start to butt heads in which the moral and ethical questions are not even asked.
Stablecoins are great for hedging against inflation, or transferring currency across the city or across borders, but you should never think of them as a savings account. But there only exists on instance of the real-world assets that back that Libra. The entities that control the backing can’t back the Libra on each side of the hard fork without somehow magically doubling their money.
Long-awaited project to arrive as soon as January, with just one dollar-backed coin. What the report doesn’t tell us is what some of the Libra Association’s more high-profile members such as Spotify and Uber plan bo do when the coin is available to the public. They told the Financial Times they’ll take a wait and see approach before investing in use cases. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
As such, government officials have not yet decided to approve the new Libra crypto Facebook project, which will further increase the company’s role in society and the finance sector. New coins will be issued when the organisation sells them to retailers for fiat money. The coins will be ‘burned’ when retailers return them to the Association for fiat money.
The Libra Blockchain
Some 1.7 billion adults globally are unable to access a traditional bank; however, many of those people own a mobile phone. In Libra’s white paper, one of the main problems it wanted to address was how much it costs for individuals in developing countries to move money. In these developing countries, money sending services charge steep fees and so economic rents were significant and disproportionately impacting poorer people. Diem Association was to act as a regulatory body for the cryptocurrency and it was not to be run solely by Facebook. Instead, the association was made up of 28 founding partners, which included Mastercard, Visa, eBay, and a number of other companies. Facebook was entitled to one vote, just like the other members of the association.
Microsoft testing built-in digital asset wallet for Edge browser: report
Get a daily newsletter packed with stats about trends affecting your industry. Industry observers have speculated whether Libra will provide meaningful privacy to its users. Facebook’s plan is to let its subsidiary Novi Financial manage Libra for Facebook users, and Facebook executives have stated that Novi will not share account holder’s purchase information with Facebook without authorization. However, the system is also planned to include a friend-finder search function, and the use of this function will constitute permission for Novi to combine the account holder’s transaction history with their Facebook account. US regulators contacted Visa, PayPal, Mastercard and Stripe, asking for a complete overview of how Libra would fit into their anti-money-laundering compliance programs. President Donald Trump tweeted on 12 July 2019 that “If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.”
Facebook’s crypto project sold after political backlash
“This combination could have detrimental effects on competition and lead to market concentration in sectors of the real economy,” they said. The Diem Association, then known as the Libra Association, first set up headquarters in Switzerland before abandoning those plans in May 2021 and moving to the U.S. I am not 100% certain that the Facebook Libra Cryptocoin Project is doomed to fail, more likely, it will be adopted by some other amicable national city-state, under another name, with its own people on the counsel. Well the merchant lords are under the gun of the king, which mints their coins, so no, I cannot say I am necessarily surprised by this. Meta and its Facebook social network don’t have great reputations for privacy protection. “The Novi pilot is ending soon,” according to the notice, which was reported earlier by Bloomberg News.
Almost a year ago, Facebook announced it would create a global digital currency called “Libra” in order to help the billions of people around the world who lacked access to basic financial services. The currency would be a “stablecoin” backed by a basket of sovereign currencies such as the dollar, the euro and the yen. The proposal provoked widespread skepticism about Mark Zuckerberg’s motives—surely financial inclusion was just a veil for data collection ambitions—as well as criticism that Libra would undermine the U.S. dollar and cause all sorts of other problems. But the proposal also prompted a number of central banks to initiate or speed up research on the possibility of official digital currencies. I preview my conclusions in the introduction, which are that we should create a reasonable regulatory framework under which Libra can operate. The competition in payments is a good thing, and Libra may have some positive benefits for financial inclusion.
The Libra Association had also planned to create a composite of all of its tokens. The group came out with this plan after regulators expressed concerns over its original intention to create a cryptocurrency based on a basket of real-world currencies. Beyond the positives brought to the crypto-community, I think GlobalCoin can also help citizens of third world countries who don’t have the luxury of a stable currency (or at least as stable as the Dollar is..) to store their value within. GlobalCoin will be pegged to a “basket of fiat currencies”, and is slated to be a stable coin. However, Facebook definitely has the time, money, and resources to address the issue effectively. Facebook is offering people of impoverished nations a chance to take part in the global economy.
Nevertheless, one thing diem has achieved is a global race among central banks to figure out their own digital money strategy. The People’s Bank of China isleading the way, trialing a digital version of the yuan in a number of cities, while Britain’s central bank isexploring whether or not to issue its own digital currency. Libra was intended to be used as a simple medium of exchange around the world. Backing the cryptocurrency with a basket of major global currencies was intended to provide price stability. That, in turn, would have promoted the efficacy of the coin as a simple currency that can be used for daily transactions.