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!
Facebook is planning to launch a cryptocurrency it hopes will “transform the global economy.” The currency, named Libra, is being developed by Facebook, but the company intends to share control with a consortium of organizations, including venture capital firms, credit card companies, and other tech giants. Read more.
At 18:00 UTC on June 20, the world’s largest cryptocurrency by market capitalization broke upwards on the daily chart, after being held beneath $9,348 for an extended period of time. Read more.
Russia's parliament, the State Duma, will adopt the country’s major crypto bill “On Digital Financial Assets” (DFA) in the next two weeks, according to a local senior finance official. The news was reported by Russian government-backed news agency TASS on June 19. Read more.
Take Binance, which pre-announced a soon-to-come $81 million or so Bitcoin transaction via Twitter on Monday. The world’s biggest crypto-trading platform told followers there’s “no need to FUD,” referring to the popular acronym crypto bulls use to describe unwarranted fear, uncertainty and doubt. Read more.
According to Lightning Labs application developer Tankred Hase, roughly 2,000 users downloaded the app across both iOS and Android. Both his inbox and the inbox of his colleague, developer Valentine Wallace, were flooded with support requests. Read more.
The Atlantis hard fork for Ethereum Classic (ETC) has been officially set to occur at block 8,772,000 on the blockchain, according to the Ethereum Classic Improvement Protocol (ECIP) finalization call via Discord on June 20. Read more.
The Computer Science and Artificial Intelligence Laboratory (CSAIL) at MIT designed a system to run complex mathematical algorithms to secure online communication. “Fiat Cryptography,” as the code is called, currently secures about 90 percent of Google Chrome communications. Read more.
This year’s resurgence of Bitcoin and other cryptocurrencies has yet to translate into the same kind of gains for some of Asia’s more prominent crypto-linked stocks. Read more.
Having crossed above the $9,000 level on Sunday ahead of Facebook announcing its own cryptocurrency, Libra, bitcoin is now up 146% this year. But that could be just the beginning for its bounce back, says bitcoin bull and Fundstrat Global Advisors’ research chief Tom Lee. Read more.
Ripple CEO Brad Garlinghouse is adamant that Facebook’s unveiling of its Libra cryptocurrency will lead to big business for his banking software and cryptocurrency startup. Read more.
Facebook’s plan to reinvent money owes much to the runaway success of payments via social media in China, only with a crypto spin. The problem it will bump up against in the U.S. and Europe is that consumers already have decent mobile-payment options using established currencies, regulations and financial plumbing. Read more.