The rumors have finally been confirmed. Facebook is launching a cryptocurrency. The announcement came as expected Tuesday and sent shockwaves around the globe.

Here's what we know so far:

  • Facebook announced the release of a cryptocurrency, Libra, with the goal of enabling "a simple global currency and financial infrastructure that empowers billions of people.""
  • The Libra Blockchain is being launched as a permissioned blockchain but is planning to transition to a permissionless blockchain over time.
  • Libra is backed by a mix of stable assets, "including bank deposits and government securities in currencies from stable and reputable central banks." Unlike other stable coins pegged to the U.S. Dollar, Libra isn't backed by one single currency, instead, the average of many.
  • The cryptocurrency is governed by a non-profit (Libra Association) based in Geneva. The Libra Association will be made up of 100+ "geographically distributed and diverse businesses, non-profit and multilateral organizations, and academic institutions."
  • Each founding member will have no more than 1% of the vote, including Facebook itself. Members will be asked to invest $10M, along with $280,000 of annual costs.
  • A user-facing crypto wallet to store and transact Libra, Calibra, is being released.
  • Facebook claims their advertising business will not be a part of Libra in any way, and that data collection will remain separate from the association.

The Fall Out:

In the days following the release, the reviews of the cryptocurrency have been mixed. Many cheered on Libra, calling it positive for crypto adoption, while others expressed outrage.

French Finance Minister Bruno Le Maire led the charge, saying "it is out of question [that Libra] become a sovereign currency. It can't and it must not happen."

German member of the European Parliament Markus Ferber piled on, calling Libra a "shadow bank" and a handful of U.S. senators objected, saying Facebook is already too big and can't be trusted with users financial data.

As a crypto advocate, I believe the response from regulators says something good about Libra. While their concerns are justified, so is Facebook's mission to create a more democratized, global, and digitized economy.

The problem? Trust.

The only solution to this is a cryptocurrency that operates free of a centralized company or group of companies.

Oh, wait, that already exists!

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