Facebook, the online social media and social networking service company has announced a new digital currency called Libra, for simplifying payments. This new digital currency is based on the blockchain technology and allows billions of users to make financial transactions across the globe. It’s a simple digital currency and financial infrastructure that is developed to create a more inclusive financial system. Its three most promising features are:
• It is created on a completely secure, scalable and reliable blockchain.
• It’s backed by a reserve of real assets that are meant for building trust in its intrinsic value.
• It is governed by an independent Libra association that consists of diversified businesses, non-profit and multilateral organizations and academic institutions.
For every Libra created, a cache of bank deposits and short-term government securities is set aside in Libra Reserve. This reserve will be administered by Libra Association that will ensure preserving the value of the currency. The initial members of this association will work for finalizing the association’s charter and become the ‘founding members’ upon its completion. The current members include Mastercard, PayPal, PayU, Visa, Stripe, eBay, Facebook, Lyft, Spotify AB, Uber, Vodafone Group, Bison Trails, Coinbase, Inc., Xapo Holding, Ribbit Capital, Thrive Capital, Kiva, Mercy Corps, Women’s World Banking, etc.
For many banks, payment wallet companies & credit card companies, this could be a real game changer. With more than 2.40 billion worldwide Facebook users, this new digital currency is set to revolutionize the global payments and transfers.