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Libra White Prepares Financial Revolution

06/19/2019
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  • Libra
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White Paper on the new Libra cryptocurrency published by Facebook actually announces a financial revolution. The company plans to create a global payment system that will completely change the view of the global economy.

The Long-Awaited Project

Distributed management, security and open access are the principles that are incorporated into Libra project by Facebook. Thanks to their implementation, a new cryptocurrency has every chance to change the standard of people’s living. The White Paper reports that users will have equal opportunities in obtaining financial services.

The principles outlined in the White Book by Facebook overlap very closely with that of Satoshi Nakamoto. His White Paper also spoke about decentralized open network with a high security level.

The project will be created on blockchain with open source, which will be available to any user. Moreover, this is a completely new blockchain, which supports the ability to scale up to a billion accounts. New Libra cryptocurrency will be provided with a basket of assets, which guarantees the course stability in any macroeconomic disasters.

Libra Legal Aspects

Facebook states that its project will create an inexpensive and fast means for capital circulation without any restrictions. However, they understand that its implementation over the long term is capable of breaking the monopoly of Central Banks and traditional financial institutions. Therefore, large corporations become the shareholders of the project. Facebook could have found the billion dollars needed for implementation, but it decided to launch it along with other corporations.

Libra will be managed by an independent association where Facebook team will not have a decisive vote. The White Paper states that the company will have the same rights as each of the association members.

Libra opens headquarters in Geneva; it will include MasterCard, PayPal, Visa, Booking, eBay, Vodafone, Mercy Corps and many others. There are 100 commercial and non-profit organizations overall; a complete list will be known until the end of 2019. Moreover, it is not enough to invest $ 10 million to make this list. This requires global recognition and readiness to actively develop this project.

Criticisms against Libra

It's not all that simple. Judging by the project scale, the association plans to fundamentally change global financial flows. This threatens the monopoly of Central Banks in monetary policy. In fact, these institutions may lose control over the liquidity flow. For this reason, it is likelihood that in some countries Facebook will face serious opposition.

Russia and China authorities are extremely watchful of the emergence of this initiative. Thus, the Head of one of the State Duma Committees of the Russian Federation noted that the country would ban this asset’s circulation as a means of payment.

Potential risks are ideally reflected on trading platforms. Investors understand possible difficulties of Libra blockchain implementing. After the White Book publication, Facebook shares fell from $ 191.1 to $ 188.9. There wasn’t a global fall; but there also was no noticeable demand on the stock exchanges.

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