Facebook will disclose details regarding its cryptocurrency, reportedly code-named ‘Libra’ on June 18th. The date confirmation comes in via German news site WirtschaftsWoche. Media reports have also mentioned that Facebook has reportedly briefed several investors about the same as well.
Laura McCracken, Facebook’s Head of Financial Services & Payment Partnerships for Northern Europe, told German Magazine WirtschaftsWoche‘s Sebastian Kirsch, that the white paper would debut June 18th, and that the cryptocurrency will be pegged to multiple currencies rather than a single one like the US dollar. This will be done in order to cope with price fluctuations. Laura told kirsch, when asked about the details, that she has to wait until June 18th, when a whitepaper was supposed to be published to get more details. Laura thought that the date was already public, which Kirsch later confirmed, that it wasn’t.
According to reports from TechCrunch, one source says that Facebook is targeting 2020 for the formal launch of its cryptocurrency project. It is possible that the announcement date could vary if some unpredictable chaotic situation with partners or government arises. When contacted by us, Facebook declined to comment on the matter.
The debut of Libra (that is the rumour-mill name) may introduce a new period of commerce and payments for the social network. It may introduce low fee or no-fee payments between friends or remittances from migrant worker abroad to his/her family. Dodging credit card transaction fees may enable the cryptocurrency to offer cheaper methods of payments to merchants for traditional ecommerce, to ease micro-transactions for news articles etc.
Facebook is likely to use codename Libra for its cryptocurrency project, according to reports from The Information and other media outlets. The company has in fact registered a company called Libra Networks in Switzerland for financial services, reported Reuters. Libra could be a play on the word LIBOR, an abbreviation used for London Inter-bank Offered Rate which is used as benchmark interest rate for borrowing between banks. LIBOR is for banks and Libra is destined for people.
The cryptocurrency will be a stablecoin, which essentially means that it will have a stable price to curb complications in the payment or negotiations process arising due to price fluctuations. It is reported that Facebook has spoken with financial institutions regarding contributing capital to form a $1 billion basket of multiple international fiat currencies and low-risk securities that will serve as collateral to stabilize the price of the coin. Facebook is in talks with various countries to pre-approve the rollout of the stablecoin.
Facebook’s blockchain project is being supervised by former PayPal President and VP of Facebook Messenger David Marcus. His team includes former Instagram VP of product Kevin Weil, Facebook’s former corporate head of treasury operations Sunita Parasuraman who will oversee the token’s treasury, and many elite engineers from Facebook’s ranks. They’ve been working in a dedicated part of Facebook’s headquarters off-limits to other employees to ensure secrecy, though the nature of the partnerships needed for launch have led to many leaks.
More details in the media have suggested that the cryptocurrency will be transferable with zero fees via Facebook products including Messenger and WhatsApp. Facebook is working with merchants to accept the token as payment, and may offer sign-up bonuses. Facebook also wants to replace physical devices for ATMs so users can exchange traditional assets for the cryptocurrency.
In terms of Governance, facebook is working to create an independent foundation to guide its cryptocurrency. Facebook is asking companies to pay $10 million for operating a node that can validate transactions made with the cryptocurrency in exchange for a say in governance. There is a possibility that node operators could benefit financially.
Updated with comments from Facebook
Summer Intern under The Tech Portal’s Fall Summer 2019 Internship program.