What is Facebook’s Libra Coin?
Libra is a global cryptocurrency based on the block chain (Libra Blockchain). The Financial Times reported about Libra starting a month ago. Also, the information on Facebook accounts was confirmed by co-founder and CEO of Facebook Mark Zuckerberg. Libra token from Facebook will be provided with real currency reserves and assets located throughout the world.
27 companies and organizations became partners of Facebook. This included the leading American payment systems Visa and Mastercard, as well as a number of well-known technology companies. The entry fee for joining the club is $ 10 million. There is no bank in the association. Credit institutions fear problems with product regulation and logistics, and several sources on Wall Street shared with FT.
Why people need Facebook’s Libra coin?
Libra coin has every chance of becoming the world’s largest project based on blockchain technology. FT notes: according to the developers’ plans, the entire huge audience (1.7 billion users) can be without a bank account. They can be outside the control area of financial regulators; make instant and almost free money transfers from the cell phones. According to Zuckerberg, such people — “non-clients” of banks with mobile phones — are at least 1 billion worldwide. A new secure, simple, and convenient method of payment for them is especially important.
For the operational management of the project, Facebook will create a new independent division Calibra. Within its framework, the social network will have a new eponymous application with a digital wallet. It will be possible to make payments in WhatsApp and Messenger. The company emphasizes that it will not use Calibra audience data for advertising purposes and share it with third parties “without the consent of users.” At the same time, each account will be assigned an identification number agreed with the authorities. Special software will monitor suspicious transactions. Facebook guarantees the restoration of lost digital “coins” for the victims of fraud “.
In the medium and long term, the initiative is expected to have a significant impact on local and global markets, the landscape of the crypto industry, global finance, and the economy.
What do global experts expect from Libra token in the future?
What does this mean for the cryptocurrency industry? First, this is a new $ 50 + billion, which will fall into the cryptosystem. That means an increase in its total capitalization. It is possible, that Libra will take second place after Bitcoin by capitalization. But its liquidity will be quite high, as it will have a “lively market” with wide demand.
Is there any danger to the whole crypto market? In the first place – it is a direct threat to all stable coins. First of all, the not very transparent USDT and all other stable coins, which were created as a response to the opacity and problematic of the USDT, will come under attack. This is due to the fact that it is much easier to trust the same centralized, but more predictable and regulated by Facebook Libra. Therefore, most likely, all payments that currently go to USDT by 90% will start to go into Facebook currency.
In the medium and long term, experts expect the Libra coin to have a significant impact on local and global markets, crypto industry, finance, and the economy.