Libra, Facebook’s New Currency…

Paula LaBrot

Facebook is poised to launch a new banking system, a global financial platform, capable of seamlessly processing world-wide, cross-border financial transactions.

Libra, the first incarnation of its new cryptocurrency, will be aimed at those who have no access to banks or credit cards, but who do have access to the internet. A cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency (tokens) and to verify the transfer of funds, operating independently of a central bank.

Augustin Lebron writes, “Libra is a cryptocurrency whose goal is to facilitate the creation of a parallel financial infrastructure that isn’t necessarily tied to any specific country, currency, or existing regulatory framework.”



Facebook already has an astronomical global network of users that can connect to each other on a social media platform and can easily be encouraged to sign on to an attached banking component. They can then use their phones to transfer money anywhere in the world for a small transaction fee, using Messenger or What’s App.  



People invest in gold. Sometimes the value is up, sometimes down. Bitcoin is an “investment coin.” Like gold, its value can fluctuate wildly. Libra will not be an investment coin. It will be a “stable coin.” reports, “Unlike Bitcoin, Libra’s value will be tied to government-issued currencies like the dollar, pound, yen, etc. Its value will be backed by a bundled group of assets, cash and securities, like any other bank. A Libra that costs $5 will always be worth $5.



All things Libra will be administrated by the Libra Association that is described by Facebook as an “independent, not-for-profit organization based in Switzerland.” It serves two main functions: to validate transactions on the Libra blockchain and to manage the reserve Libra is tied to. It will also allocate funds to social causes.

Within the Libra Association will be a governing body called the Libra Association Council, comprised of one representative of each member of the association, who will vote on policy and operating decisions. Oh, how easy it is to consolidate power! Libra Association members will earn interest on the money kept in the reserve and on the transaction fees. Though the fees are small, billions of them will add up!

Yahoo reports that initial members include heavy hitters who will perform the functions of governance: Mastercard, PayPal, Visa, Facebook, Lyft, Spotify, Women’s World Banking, to name just a few. The goal is to have 100 members. A decision can only be passed with two thirds of the Council in agreement.



Initially, the Libra will be aimed at the one-third of the world which has no access to banks. Many of us are already able to transfer money around the world through Paypal. But to register for Paypal, you have to have a bank or credit account and the receiver of your payments has to have one, also. For people with no access to banks, the Libra will make it possible for them to spend or receive Libra tokens on internet transactions.

There are definite possibilities for abuse of this system, as there are in current banking institutions. It will make it easier to take money out of the country, including for money laundering. Banks have been hacked, and so will new currencies. Users will need to be careful.   



Facebook is unveiling a new digital wallet (an app) through a new company Facebook owns called Calibra. Say you buy $100 worth of Libra tokens. That $100 is sent to the Libra Reserve managed by the Libra Association. Your digital wallet, only accessible by you through passwords or pin numbers, stores your balance. You can send Libras from or receive Libras into this virtual wallet, using your smart phone or computer. You should be able to cash out the Libras in the currency of your location, but the big corporations involved are aiming for you to “spend” it on their products and services in Libras. They will probably offer discounts for payment in Libras. And Facebook can offer discounts on advertising for Libra Association members, because the Calibra wallet is where they will mine data from you to sell to marketing companies.



Pros include accessibility, convenience and low transaction fees.

Cons: this cryptocurrency will be unregulated, run by corporations, not governments.

Amid grave privacy concerns, Facebook promises not to track users’ transactions, but they sure have a history of breaking that promise and selling lots of data to marketing firms and providing law enforcement and government agencies with users’ data.  



For a thorough explanation:

No one is sure if Libra will boom or bust. If it booms, full speed ahead for a very disruptive time as the winds of change blow us into a whole new currency landscape.

Meanwhile, when the subject comes up at parties, dear readers, you will be ready!

Vamos a ver!


Paula LaBrot

Paula LaBrot is a 30-year resident of Topanga, a futurist with a special interest in the uncharted waters of cyberspace.

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