Facebook will introduce its Libra cryptocurrency next week

Facebook will introduce its own Libra cryptocurrency on June 18, writes The Wall Street Journal. Its launch is scheduled for 2020. At the same time, the creation of a consortium will be announced, which will include Visa, Mastercard, PayPal, Uber, Stripe and Booking.com and other investors - each of them will invest approximately $ 10 million in Libra. The consortium members will manage the cryptocurrency independently of Facebook.

What is this. Cryptocurrency Facebook stablecoin (“stable coin”) is being developed in secrecy. We first heard about it a year ago, and the first details appeared only at the end of February, when the project was already at an advanced stage. Libra will be a “stablecoin” pegged to the dollar, which should protect it from the fluctuations that other cryptocurrencies are subject to. Own currency will make Facebook more independent from regulators, the WSJ notes.

Usually, cryptocurrencies are perceived as an alternative to traditional payment systems, so participation in Libra Visa and Mastercard is unusual.
The advantage of Libra is that Facebook already has 2.4 billion monthly active users. This will allow you to quickly find the first buyers.
Users will be offered payments not only on the basis of Facebook, but also through WhatsApp and Facebook Messenger, as well as on partner sites.
Facebook is developing ATM-like terminals to convert Libra.

Project risks. Most importantly, Facebook will have to overcome the barriers of regulators. Earlier it was reported that representatives of the company had already held a number of important negotiations - in particular, they met with Mark Carney, Governor of the Bank of England (acts as the Central Bank in the UK), with representatives of the US Treasury and top management of Western Union. But the details are unknown. It is also unclear how the company will fight fraud and money laundering through Libra.

Banks and other partners. Facebook has been in talks with Visa, Mastercard, and major payments operator First Data Facebook to raise $1 billion in token collateral. Dozens of online trading and mobile payment services companies are also among potential partners.

What do we have. Libra is likely to become the main competitor of Pavel Durov's Gram cryptocurrency, which Telegram is due to launch in October this year. And this is a very dangerous competitor: the Facebook project is able to reach 2.7 billion people (including integration with Instagram and Messenger), while the immediate goal of Telegram is about 300 million users. We wrote clearly and in detail about how Durov's blockchain platform will work here .