Facebook announced its new Libra cryptocurrency. Facebook’s plan is to launch it in 2022, with a primary goal of serving the millions of people in underdeveloped countries that don’t have access to banking or financial resources. Even though that’s their goal, it’ll be very available in the US and Western markets, too.
“Success will mean that a person working abroad has a fast and simple way to send money to family back home, and a college student can pay their rent as easily as they can buy a coffee,” Facebook said.
There’s still a lot of work to be done before Libra is released to the market in the first half of 2020. Facebook actually released a white paper that explains Libra, and how it plans to work out the kinks in blockchain. That said, it’s not available to buy just yet, but we do have some idea on what will all be involved.
The value of Libra
Before understanding how to buy Libra, it’s worth looking at the value. One of the problems with cryptocurrency right now is that it is so volatile. As you know, Bitcoin fluctuates just like the wind, and owners of it are either seeing serious losses or unprecedented gains.
Facebook wants Libra to be way more stable than that. In fact, the plan is for it to be “as stable as the dollar,” with it being backed by actual assets. Facebook hasn’t said what assets those are exactly, but with the company wanting to be it as strong as the dollar, it would have to be pretty good.
How do you buy Libra?
Knowing that Libra will at least try to be strong as the dollar should give consumers some peace that they aren’t going to lose money if they decide to actively use it.
That said, how is Facebook going to let you purchase the Libra cryptocurrency? Not on its own, of course. Facebook will be creating its own wallet for the Lira currency — and it’s calling it Calibra. It’s actually part of the plan to keep Libra stable:
The plan is that Facebook and Calibra, as well as founding members of the Libra Association, are going to earn interest on the money that users cash in. That money will be held in a reserve, which is supposedly going to help the value of Libra stay stable. As you can see, that’s one way how Facebook plans to monetize this, too.
That said, buying Libra will obviously happen within the Calibra wallet app. It’s not available yet, but from Facebook’s announcement, users will be able to cash in a local currency to acquire Libra, and then spend them like dollars.
The advantage is, especially to under-served, unbanked areas, is no large transaction fees, and you likely won’t even have to have your real name attached to the transaction.
You’re going to be able to do a lot with Libra and Calibra. When the platform launches, Calibra will let you send Libra currency to almost anyone with a smartphone, “as easily and instantly as you might send a text message and at low to no cost.”
In time, Facebook wants you to use Libra for your everyday purchases — they want to expand to be able to offer additional services for people and businesses: “like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass.”
So, that’s Libra and how you’re going to be able to buy the cryptocurrency in a nutshell. There’s a lot of things that we’re not quite sure about just yet. One primary one is how this is going to be advantageous to the average consumer. You can pretty much already go cashless, using Apple Pay.
And it’s hard to imagine that Libra is going to be adopted faster than Apple Pay, especially with the concern of it being “Facebook’s currency”, even if it is an independent association.
We’re also not sure how value is going to hold up, because, from current information available, even though it’s “going to be as strong as the dollar”, it’s not looking users will get dollar-for-dollar value. It’s still going to fluctuate, which means one US dollar might not always equal one Libra coin.
Ultimately, we’ll see what happens next year when Facebook is ready to launch Calibra and the stablecoin. Right now, all anyone can do is speculate.