Earlier this week Facebook launched a new currency “Libra” through its white paper, setting out a vision to become a global provider of low cost payment services based on a new decentralised blockchain “Libra Blockchain”. The new global digital currency will be backed by a basket of bank deposits and Government securities to provide price stability to the new currency. If the project is successful billions of users will be able to send payments around the world from their mobile wallet installed on mobile phones at high speed and for negligible cost.
Governance is provided through the Libra Association, a Swiss based not for profit organisation made up of a number of international businesses which will act as the validator nodes. These constitute the initial Founding Members and include businesses such as MasterCard, PayPal, Vodaphone Group and eBay, Uber amongst others. The software will be open source allowing users to build further products and services. The Libra Blockchain will be a permissioned blockchain with a number of nodes operated by these large international businesses. The aim is to transition to a fully permissionless blockchain as developments in technology allow for scalability of the platform to be achieved without loss of effectiveness.
The Libra Blockchain will have its own new programming language “Move” which is intended to make it easier to write “smart contracts” that are less prone to bugs and thereby reduce security problems. The new language design has picked up on previous problems to enhance security and prevent some of the incidents experienced by cryptocurrencies to date.
The new blockchain and currency will have to ensure compliance with a number of regulatory requirements and will face intense scrutiny from commentators particularly over data controls and privacy where Facebook has been criticised before. The project could however be genuinely revolutionary in the global payments space if adopted by the wide number of Facebook, Instagram and WhatsApp users.
The link to the Libra white paper is at https://libra.org/en-US/white-paper/