Dubbed “Libra”, this is Facebook’s attempt at getting into the cryptocurrency game. However, what’s interesting about Libra is that it will not be fully controlled by Facebook themselves, which should be of some relief to those who might not view the company in a favorable light given all the privacy scandals the company has been embroiled in. Instead, Facebook will have a single vote in its governance, with the other votes belonging to the likes of Visa, Uber, and Andreessen Horowitz.
As to how Libra will differentiate itself from other cryptocurrencies like bitcoin, it will be different because it claims to be less volatile. This is because Libra will be backed by government-backed money, which while not 100% stable, should still offer some sort of confidence in it, which we suppose could be likened to buying government bonds.
According to Facebook’s David Marcus who is heading up Calibra, a newly-launch subsidiary of Facebook, “If you buy $50 of Libra, your $50 makes its way to the Libra Reserve. It’s designed to be stable and confer values on Libra that makes it more like a traditional currency than any of the digital currencies are now. This is the way paper money was created.”
Libra is expected to launch in the first half of 2020, where Facebook also plans on using its new Calibra subsidiary to create digital wallets that will allow users to save, spend, and send their Libras. For those who are interested, Facebook has also published a white paper about Libra that you can read about.