Facebook is reportedly set to unveil its much-anticipated cryptocurrency, Libra, next week with the release of its whitepaper and testnet. On June 18, the social media giant and its partners are reportedly set to introduce the Geneva-based Libra Association, which will oversee the cryptocurrency.
According to The Block, Facebook has shared an introductory blog post with various news outlets, which describes Libra as a “simple global currency and financial infrastructure” that’s meant to reach billions of people.
The cryptocurrency will have its own Libra Blockchain, a “secure, stable, and reliable blockchain” that’ll be backed by the Libra Reserve, a reserve that’s going to includes real assets backing the cryptocurrency to provide it with stability, low inflation, fungibility, and global acceptance.
The crypto news outlet adds the Libra Blockchain will be open-sourced, under an Apache 2.0 License. The blog post was reportedly not shared with any major cryptocurrency publication under an embargo by Facebook as the social media giant reputedly doesn’t want to work with these publications.
The social media giant reportedly wants to give the “1.7 billion adults globally” who currently don’t have “access to a traditional bank” and are “outside of the financial system” an opportunity. In the blog post, Facebook also criticizes existing blockchains, which hasn’t been able to reach mainstream adoption and are as such poor solutions as both stores of value and mediums of exchange.
Its embargoed block post adds that while some cryptocurrencies have tried to disrupt the existing system and bypass regulations, Facebook believes collaborating with the financial sector and regulators is the “only way to ensure a sustainable, secure, and trusted framework” for its cryptocurrency.
Libra, Facebook’s Cryptocurrency
According to Facebook’s head of financial services & payment partnerships for Northern Europe Laura McCraken, the Libra won’t be pegged to the value of the U.S. dollar, but that of various currencies to prevent price fluctuations.
Speaking to German magazine WirstchaftsWoche, McCraken confirmed that while she wasn’t involved in the social media giant’s blockchain team, led by former PayPal president and VP of Facebook Messenger David Marcus, a whitepaper is coming out on June 18.
While the Libra Blockchain is set to be announced soon, Facebook is only going to launch the cryptocurrency itself by 2020. It’ll be usable for low or no-fee payments between its users through its platforms, including WhatsApp and Facebook Messenger.
The social media giant has reportedly spoken to financial institutions to form a $1 billion basket of multiple fiat currencies and low-risk securities to create collateral for the coin, and is said to be in talks with merchants to get them to accept the token as a payment method, potentially offering them sign-up bonuses.
Some sources note it will create physical ATMs for users to buy the cryptocurrency. Companies are being asked to pay $10 million to operate a node and validate Libra transactions, in exchange for a say in the token’s governance. Its partners, according to TheBlock, include investors like Union Square Ventures and Andreessen Horowitz, as well as cryptocurrency exchange Coinbase.
Among the companies the news outlet reported were with Facebook were giants like eBay, PayPal, Vodafone, Uber, and Spotify. Calibra, a company the social media giant set up to oversee its crypto efforts, is also among its founding members.