The cryptocurrency industry space has seen growth and massive innovations in recent times. The recent trend in the industry has laid the foundation for the mainstream adoption which the industry has been awaiting. One of the events that are expected to transform the crypto industry is the venture of a giant social media firm, Facebook, into the crypto space. The social media firm venture into the Crypto space is expected to be facilitated by “libra association”, a consortium of firms. Here are the things you need to know about this “libra association” and what the association will be working on as Facebook is set to rock the Crypto world with its venture into it.
The Libra Association
Facebook’s plan to venture into the Crypto space was first reported around May last year. During the period, Facebook announced then that David Marcus, vice president of its Messenger app and once-member of Coinbase’s board, would lead its blockchain efforts. After a year since the news of its Crypto plan first surfaced, Facebook revealed in a recent post that its Crypto project would be spearheaded by “Libera Association”, a consortium of firms and the white paper of “Libra” will be unveiled next week, June 18, 2019. The association which will be based in Geneva, as registered by Facebook earlier will oversee its “libra” “a simple global currency and financial infrastructure” meant to reach billions of people.
The consortium of firms includes companies from different spheres such as Blockchain, E-commerce, Investment firms, Nonprofit, Payments, Ride-share, Social Media, Telecommunication.
Blockchain firms that are part of the consortium are; BisonTrails, Xapo, Coinbase, and Anchorage. From the E-commerce sector, there is; Ebay, Mercado Pago (MercadoLibre), and Farfetch. Investment firms are; Andreessen Horowitz, Union Square Ventures, Creative Destruction Lab, Ribbit Capital, and thrive capital.
Also, the non-profit firms which are part of the consortium include Women’s World Banking, Kiva, and Mercy Corps. The payment firms include; visa, stripe, PayPal, PayU and MasterCard. Ride-share includes Lyft and Uber. Social media include Facebook and Facebook calibra. The telecommunications firms include Vodafone, Illiad, and booking holdings.
Notably, the wide reach of the firms that made up the “Libera Association” is expected to enhance the reach and success of the crypto project. This will be supporting the massive network and a large user base that Facebook has already. Facebook is stated to have plans to include wall street firms originally. However, this was discouraged by the lack of interest shown by giant firms like Goldman Sachs and JPMorgan. Despite this, there are still plans to grow the firms to 100 to expand the reach and use of the cryptocurrency more.
The crypto project is expected to be funded by these firms that made up the consortium. Each member of the consortium will pay $10 million to manage their own node, which allows members to access and view the network. The fund will back the coin, which is a stable coin. It will be pegged to many currencies to avoid fluctuation and volatility.
Meanwhile, if the project is successful as is envisaged by many in the Crypto space, Facebook could net $1 billion from the 100 companies it hopes to include in the project. Each of the firms will reportedly get a seat in the Libra Association as node operators, sending a representative to the consortium.
Libra is a stable coin that will be built on the libra blockchain, a “secure, stable, and reliable blockchain” and backed by Libra Reserve, “a reserve of real assets” that will provide the cryptocurrency with “stability, low inflation, global acceptance, and fungibility.”
The launch of Libra will mark the first venture of Facebook into Cryptocurrency and is set to avail 1.7 billion adults globally who are outside of the financial system with no access to a traditional bank opportunity to access banking system through the crypto project. The coin may be used as payment for messaging app among other things. It is reported that the coin would enable users to transfer money through WhatsApp messenger and Facebook with zero fees.
Though the white paper of the project will be released on the 18th of June, the project is expected to be launched by the first quarter of 2020. Ahead of the full launch, the launch of the beta version of the crypto project is expected to take place this year.