Last month, Facebook made headlines when they announced their plans for Calibra. Calibra is a new subsidiary of Facebook that focuses on financial services. Their goal shall revolve around the utilization of a new digital currency, powered by blockchain, called Libra. Calibra will first introduce a digital wallet and is expected to launch in 2020. This announcement from Facebook has received mixed reaction from both the crypto and mainstream media.
Despite the split opinions, there seems to be a consensus that Facebook can very well pave the way to global adoption of blockchain technology. The reason behind the consensus is that Facebook has more than 30% of the entire world’s population or 2.38 billion people as its users. As for the rest of the population, it is simply down to two key things on why they do not possess a Facebook account: no access to internet connection or freedom of choice.
Let’s explore a little further.
What is Libra?
Libra is first and foremost, a cryptocurrency created to let people access and participate in the Libra Network. Users shall be able to exchange fiat currency into these digital currencies and use them in online transactions.
The digital coin is essentially a stable coin as it is pegged to government-issued currencies such as USD, EUR, SGD, etc. Many decentralized cryptocurrencies like Bitcoin or Ethereum, are volatile in its valuation. Facebook seeks to create a more stable cryptocurrency to encourage it as a means of facilitating ordinary online consumer transactions.
Traditionally, to make financial transactions, one has to go through banks or what is available today as online money transfers such as PayPal, Transferwise, and many more. However, it is important to note that existing financial systems today are of their own technology. For the sake of being brief, what makes Libra special as compared to other financial systems, is that it is powered by the blockchain.