Cryptocurrency has received a mixed response since its arrival. However, with the possibility of being a globally accessible currency, the average consumer cannot shy away from its many benefits that include instantaneous worldwide transfer, lower transaction fees, and increased accessibility.
This is what Facebook claims to aim for when it announced its cryptocurrency called Libra.
- What is Libra?
Scheduled to release in 2020, Libra, unlike Bitcoin, does not aim to replace the current financial system. It only intends to make money transfers across the globe more accessible and as easy as sending a text message. Libra, essentially, aims to create and extend a digital payment method for people and places that have no access to traditional financial institutions like banks.
- How does Libra work?
The major difference between Libra and other cryptocurrencies is that government-backed assets will underlie it, giving it stability. Further, it will be managed by a Swiss-based non-profit organization that is backed by many international companies like eBay, Uber, Lyft, Facebook, and many more.
Per Facebook, Libra will be available on Messenger and WhatsApp. Users can use local currency to buy Libra, which will be held in a digital wallet called Calibra. Libra can be spent on products from partnered merchants.
Furthermore, a user can withdraw money by converting their digital currency into local currency at a fixed exchange rate similar to converting, for example, dollars into euros.
- More on Libra
However, Libra is not tagged to a single currency. Its value will depend on its underlying assets, which may fluctuate. Yet, Facebook guarantees that Libra will be more stable than other cryptocurrencies.
Importantly, to assuage security concerns, Facebook assures that Libra payments won’t be connected to Facebook data or used for targeting.
Also, non-Facebook users need not worry about being left out. Libra will not be available until 2020. Once it rolls out, there will be several ways to use the crypto.
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