{"id":286,"date":"2019-12-30T07:20:37","date_gmt":"2019-12-30T07:20:37","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=286"},"modified":"2020-04-20T14:54:28","modified_gmt":"2020-04-20T09:24:28","slug":"facebooks-libra-cryptocurrency-most-talked-now","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/","title":{"rendered":"The most-talked Facebook&#8217;s Libra cryptocurrency"},"content":{"rendered":"\n<p>With the world still getting used to <a href=\"https:\/\/www.tickertape.in\/blog\/cryptocurrencies-vs-mutual-funds\/\">cryptocurrencies<\/a> as a medium of exchange, Facebook has given us a new, rather disputed topic to chew on. The once social media giant is now amidst turmoil due to scrutiny of its data privacy practices and plausible antitrust violations. Still, as ambitious as it may sound, Facebook has announced its plan to roll out Libra cryptocurrency. Though the Libra cryptocurrency launch date is not known, Facebook plans to make it available in 2020.<\/p>\n\n\n\n<p>While some experts suggest this move may revive\nFacebook\u2019s revenue system, others challenge that it will disrupt the\ninternational banking system. That\u2019s why, ever since the Libra crypto announcement, the alternative currency has been the talk of the town and has attracted mixed feelings. Let\u2019s look at the most-discussed points about Facebook, Libra, and Calibra \u2014 Libra cryptocurrency app \u2014 so you can gain meaningful insights into the topic and draw a conclusion for yourself.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#A-tad-bit-more-about-the-Libra-cryptocurrency\" title=\"A tad bit more about the Libra cryptocurrency\">A tad bit more about the Libra cryptocurrency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#How-will-the-Libra-cryptocurrency-work\" title=\"How will the Libra cryptocurrency work?\">How will the Libra cryptocurrency work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Libra-Association-will-overlook-the-activities-of-the-crypto\" title=\"Libra Association will\noverlook the activities of the crypto\">Libra Association will\noverlook the activities of the crypto<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Libra-cryptocurrency-will-be-minted-as-per-its-demand\" title=\"Libra\ncryptocurrency will be minted\nas per its demand\">Libra\ncryptocurrency will be minted\nas per its demand<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Libra-will-start-off-on-a-permissioned-blockchain\" title=\"Libra will start-off on a permissioned blockchain\">Libra will start-off on a permissioned blockchain<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Calibra-Libra-cryptocurrency-app-and-digital-wallet\" title=\"Calibra: Libra cryptocurrency app and digital wallet\">Calibra: Libra cryptocurrency app and digital wallet<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Possible-threats-that-Libra-and-Calibra-can-cause\" title=\"Possible threats that Libra\nand Calibra can cause\">Possible threats that Libra\nand Calibra can cause<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Data-privacy-and-security-concerns\" title=\"Data privacy and security\nconcerns\">Data privacy and security\nconcerns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#How-can-the-Libra-association-crypto-improve-Facebooks-revenue-system\" title=\"How can the Libra association crypto improve Facebook\u2019s revenue system?\">How can the Libra association crypto improve Facebook\u2019s revenue system?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#How-can-Libra-disrupt-the-global-banking-sector\" title=\"How can Libra disrupt the global banking sector?\">How can Libra disrupt the global banking sector?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Regulators-stand-regarding-the-Libra-cryptocurrency\" title=\"Regulator\u2019s stand regarding the Libra cryptocurrency\">Regulator\u2019s stand regarding the Libra cryptocurrency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#Recent-developments\" title=\"Recent developments\">Recent developments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/facebooks-libra-cryptocurrency-most-talked-now\/#How-will-the-new-Libra-work\" title=\"How will the new Libra work?\">How will the new Libra work?<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A-tad-bit-more-about-the-Libra-cryptocurrency\"><\/span><strong>A tad bit more about <\/strong><strong>the Libra cryptocurrency<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>First things first, Libra is not Facebook\u2019s\ncryptocurrency!<\/p>\n\n\n\n<p>Wait, what?<\/p>\n\n\n\n<p>Yes, you read it right.<\/p>\n\n\n\n<p>Despite Facebook rigorously promoting Libra cryptocurrency as its\nown, it is not directly associated with Facebook. In fact, it is the brainchild\nof the Libra Association, a non-profit organisation belonging to Facebook Inc.\nbut based in Geneva, Switzerland.<\/p>\n\n\n\n<p>Like any other crypto, Libra will be a non-government alternative to fiat currencies that you can exchange for national currencies. However, in contrast to traditional crypto whose value fluctuates wildly based on speculations, the value of Libra cryptocurrency will be far from volatile. This is because Libra will be backed by top international currencies and <a href=\"https:\/\/www.tickertape.in\/blog\/government-securities\/\">government securities<\/a>, which are typically near to stable.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-will-the-Libra-cryptocurrency-work\"><\/span><strong>How will <\/strong><strong>the Libra cryptocurrency<\/strong><strong> work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While having stability is a plus point for Libra, there are other grey parts that have worried regulators and public. Before getting into that, understand how Libra will work to understand the concerns in a better way.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Libra-Association-will-overlook-the-activities-of-the-crypto\"><\/span><strong>Libra Association will\noverlook the activities of the crypto<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Originally, the Libra Association had 28 bigshot\ninvestors such as Visa, MasterCard and Uber that had agreed to partner with\nFacebook in its ambitious venture of launching its own crypto. To become a\nmember, each investor, except those for non-profit, put in a minimum of $10\nmillion. In turn, each member earned one vote on important issues in the\nmatters of the Libra Association. However, 7 out of the original members quit\nciting reasons including various regulatory concerns (we have discussed it\nlater).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Libra-cryptocurrency-will-be-minted-as-per-its-demand\"><\/span><strong>Libra\ncryptocurrency<\/strong><strong> will be minted\nas per its demand<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Libra cryptocurrency will be made available on a need basis. That\nis to say, the association will buy underlying assets worth the user demand,\nmint the crypto, pay the users, and then burn it once used.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Libra-will-start-off-on-a-permissioned-blockchain\"><\/span><strong>Libra will start-off on a permissioned blockchain<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This Libra association crypto will work on a hybrid blockchain called the Libra blockchain. This public-private blockchain will allow anyone to join the network but only authorise invited members to modify the software. This permissioned blockchain will then be evolved into an open system.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calibra-Libra-cryptocurrency-app-and-digital-wallet\"><\/span><strong>Calibra: <\/strong><strong>Libra cryptocurrency app<\/strong><strong> and digital wallet<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Although Libra will run on blockchain technology,\ntransactions will take place through Calibra, Libra cryptocurrency app. This digital wallet will\nbe a regulated platform that will be available for use to both individuals and\nmerchants, who can store and spend Libras via WhatsApp, Messenger, and a\nstandalone app.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Possible-threats-that-Libra-and-Calibra-can-cause\"><\/span><strong>Possible threats that Libra\nand Calibra can cause<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>By introducing Libra and Calibra, Facebook aims to facilitate seamless online financial transactions across the globe. Once launched, you will be able to transact using Libra through Calibra in two ways:<\/p>\n\n\n\n<ol><li>By linking a bank account or<\/li><li>At a physical store via cash transfers (in case you don\u2019t have access to a bank account)<\/li><\/ol>\n\n\n\n<p>By doing this, Facebook is targeting over 1.7\nbillion people across the world who don\u2019t have bank accounts. While this\nincreases financial inclusion globally, there is still a looming danger that\nmay prevent Libra from taking off smoothly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Data-privacy-and-security-concerns\"><\/span><strong>Data privacy and security\nconcerns<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>To distinguish between the social and financial\nactivities of its entities and ensure data privacy, Facebook has sworn to\nidentify Calibra, the Libra cryptocurrency app, as a separate\nentity, distinct from its own. However, certain policies of regulators have\nleft them in a mist of doubt.<\/p>\n\n\n\n<p>Says Facebook, you can only use Calibra on successful verification of your identity through a KYC process, which will aid the platform to prevent possible financial crimes and offer user support services such as password reset and the refund of lost cryptos due to fraud. Although Calibra has sworn that it will not exchange user data with Facebook for reasons like targeting ads, regulators are still not convinced, given Facebook\u2019s existing reputation of compromising user data privacy.<\/p>\n\n\n\n<p>So, if you ask the big question \u2018Is Libra a crypto\u2019, then you should know that experts opine it is not. Considering the above points, the Libra doesn\u2019t abide by most features of a cryptocurrency. First off, the crypto\u2019s activities will be overlooked by the members of the Libra Association, which should ideally not be the case. Next, Libra cryptocurrency will be minted per demand and will have underlying assets, which makes it non-volatile, a feature that doesn\u2019t define crypto.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-can-the-Libra-association-crypto-improve-Facebooks-revenue-system\"><\/span><strong>How can the <\/strong><strong>Libra association crypto<\/strong><strong> improve Facebook\u2019s revenue system?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Since Libra will be far more stable when compared\nto other cryptos like the Bitcoin, this makes Libra a preferred currency to\ntransact in emerging markets and economies where the government is unstable.<\/p>\n\n\n\n<p>Amid a crisis of facing fines of $5 million for settling a federal inquiry over its data privacy practices, launching the Libra cryptocurrency would give Facebook a new revenue opportunity. The Economist estimates the crypto to generate a whopping revenue to the tune of $19 billion by 2021. This will prove to be a major crisis for the international banking system!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-can-Libra-disrupt-the-global-banking-sector\"><\/span><strong>How can Libra disrupt the global banking sector?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>By now, you know that through the Libra cryptocurrency, Facebook is looking to improve financial inclusion and offer its users a less volatile alternative to transfer money. Given exposure to a large user-base (over 2.4 billion users of Facebook and others of brands associated with Libra), if Facebook allows users to transfer funds via Calibra at a low cost, it will eat into the profits earned by banks from international transaction fees.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Regulators-stand-regarding-the-Libra-cryptocurrency\"><\/span><strong>Regulator\u2019s stand regarding the Libra cryptocurrency<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Though Libra can ease global transactions and redefine the ecosystem of cryptocurrencies, it is not as simple as Facebook puts it across. Sensing the impending jeopardy that Libra can cause to the banking sector, the Swiss authorities have stressed that Libra has to conform to regulatory compliances, which apply to both a payments system and a bank.<\/p>\n\n\n\n<p>Further, major economies and regulators across the globe have expressed their concerns about Libra relating to data privacy, its impact on the international financial system, and the chances of being used for money laundering. As for India, the Economic Affairs Secretary, Subhash Garg has expressed that India isn\u2019t keen on embracing Libra as it would be a private cryptocurrency.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Recent-developments\"><\/span><strong>Recent developments<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>After receiving little to no support from regulators across the globe, Facebook took time off to reflect upon Libra, its cryptocurrency. Mark Zuckerberg\u2019s spirit is indomitable, and this is proof. Facebook has now decided to redesign Libra in line with what the reserve banks and IMF desire.<\/p>\n\n\n\n<p>As you read, Libra was initially supposed to be a stablecoin backed by multiple national currencies, which was set to disrupt the global banking system. But last week, Facebook published a new whitepaper that discussed a new design for Libra.<\/p>\n\n\n\n<p>As per the changes, Libra would only be tied to the currency belonging to a country where it would be issued. So, a Libra issued in the USA would be backed by the US dollar and that issued in the UK would be tied with the British Pound and so on.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-will-the-new-Libra-work\"><\/span><strong>How will the new Libra work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Since Libra would be tied to only one currency belonging to the country of issuance, the holder of a Libra coin would have to convert it into the coin of the country when crossing borders. So, if you hold a Libra in India and want to <a href=\"https:\/\/www.tickertape.in\/blog\/effective-money-saving-travel-hacks\/\">travel<\/a> to the USA, you would have to convert it from a coin tied with the INR to that of the USD.<\/p>\n\n\n\n<p>But that\u2019s not all. Facebook still plans for a central Libra coin, backed by currencies of multiple countries. However, it would work differently\u2014in a way that wouldn\u2019t threaten the international banking system. Libra would be a digital mix of several single-currency stablecoins available on the network. It would be similar to the IMF\u2019s reserve of national currencies where they are maintained in a specific ratio. Libra would also be tied to several currencies, which would carry fixed nominal weights.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can Libra can revive Facebook\u2019s revenue and disrupt the international banking system?<\/p>\n","protected":false},"author":27,"featured_media":373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[10,1744],"tags":[],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2019\/12\/Libra-scaled.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/286"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=286"}],"version-history":[{"count":13,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/286\/revisions"}],"predecessor-version":[{"id":1034,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/286\/revisions\/1034"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/373"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}