Libra is the name of the virtual currency of Facebook, developed with the support of industry giants such as Visa and MasterCard.
Maybe the cryptocurrencies have passed something fashionable, and that they do not talk so much about them; but they are still an important part of the Internet economy, it’s just that the “madness” seems to be over. That’s why it’s curious that just now Facebook is going to get into the sector, with its own cryptocurrency based on blockchain. Of course, his project is little like any other.
That Facebook was developing a virtual currency is something we already know for a while; At the beginning of 2018 the company began to investigate the use of blockchain for payments, and only a few months later its development leaked. The wait seems to have finally ended, and forecasts indicate that probably next week Facebook will present Libra, its own currency.
The virtual currency of Facebook is very close
Libra is a cryptocurrency based on blockchain, so it will focus on offering secure money transfers through the Internet. The difference is that we are talking about Facebook, of course; and when the largest social network on the planet does something, many people want to sign up. According to leaks published by The Wall Street Journal, Libra would be the cryptocurrency with more “real world” support, and would be supported by all types of financial institutions, applications and services.
We are talking about nothing less than Visa and MasterCard, the two giants of financial services, whose logos appear on credit and debit cards around the world. But Internet payment companies such as PayPal and Stripe are also involved, which could support payments in this virtual currency on their platforms; In addition, online services such as Uber or Booking.com would be involved.
It is estimated that each of these companies has invested about 10 million dollars in the development of Libra, which will give them the privilege of being part of the institution that will control the currency, the Libra Association. Therefore, Facebook will not directly control the currency, but this organization; is a movement that seems very risky, but with which Facebook wants to show that Libra is not a simple project that will be used a couple of times before disappearing, as some of its applications and services. In addition, with this he wants to avoid attracting the attention of some legislators who are already accusing the company of monopoly.
Associated with a real currency to avoid problems
Facebook wants Libra to be able to function on its own. Although, of course, it will encourage its adoption by integrating it into its services. Thanks to Libra, functions such as sending money through WhatsApp or Messenger, for example, will be activated. In addition, it is also expected to boost purchases in its social network, and even Facebook would be negotiating with online stores to allow payments in Libra.
The plans of Facebook go through to turn Libra into a serious alternative to the common money. I would even be investigating the launching of ATMs where we could exchange our currency for Libra and vice versa. And to calm the fears related to cryptocurrencies, the value of Libra will be associated with that of a real currency, such as the dollar; in this way the value will not be able to vary as much overnight as it does with Bitcoin and other currencies.
The launch of Libra may be one of the most important in the history of Facebook, and key to its future beyond the social network. The big question is how the market will react.