Facebook CEO Mark Zuckerberg has announced a new form of digital currency called Libra. Unlike Bitcoin, this is not based on cryptographic principles. Rather, it is designed to function as a globally available currency backed by real world assets.
The idea behind Libra is said to be to provide the world with a “simple global financial infrastructure that empowers billions of people around the world”. Which indicates that it is a currency that crosses borders and is recognised by national governments.
To that end, Facebook has partnered with 27 organisations from around the world in order to establish a non-profit body known as the Libra Association. This body will work to manage and implement the currency around the world, and ensure that it retains its value.
Facebook also intends to create a more stable value for Libra, setting it apart from more traditional digital currencies. To do this, it is creating the Libra Reserve; a method for preserving Libra’s value by investing in low risk funds. Ideally, this means that owners of the currency will have the confidence that they will be able to exchange their currency for the reserve value at any time.
There is already an impressive list of partners looking to integrate Libra into their payment solutions. Including Mastercard, PayPal, PayU, Stripe, Visa, Booking, eBay, Farfetch, Lyft, Spotify and Uber.
Libra is targeted at a growing number of people around the world that own phones but do not have bank accounts. Allowing them access to cashless payments without obtaining a credit or debit card.
