Home / Business / Facebook share focus: own digital world currency "Libra" – ripple agreement pushes MoneyGram share over 170 percent | 06/18/19

Facebook share focus: own digital world currency "Libra" – ripple agreement pushes MoneyGram share over 170 percent | 06/18/19

Facebook wants to change the financial world: The online network has invented a new global currency.

The digital money named Libra is similar to Bitcoin on the so-called blockchain technology, but should do without price fluctuations. Facebook will not have access to transaction data, insured responsible for the project Facebook manager David Marcus.


Purchasing Bitcoin is quite complicated and time consuming.
Here you can easily buy and sell Bitcoin

In the early days, digital money should be used primarily for transfers between different currencies, says Marcus dpa. This would allow Libra to compete with services like Western Union or MoneyGram, which charge high fees for international transfers. However, the vision is to make Libra a complete way of paying for all situations.

It should be easy for consumers to exchange and make money between Libra and other currencies. So you should be able to perform Libra transfers, for example, directly in Facebook's chat services WhatsApp and Messenger. With a link to the bank account, Libra can also be exchanged for other currencies directly on the smartphone.

To reach the big goal of a digital full currency, Facebook has forged an alliance, the Libra Association. This alliance and not Facebook will handle the digital money. Among the current 28 members are the financial service providers Visa, MasterCard, PayPal and Stripe ̵

1; which would facilitate the integration into payment systems. Also on board are Vodafone and eBay, the travel description platform Booking.com as well as music streaming service Spotify and the travel agent agents Uber and Lyft. For the Libra launch in 2020, he hopes to have more than 100 members, Marcus says. Facebook will not have any special role in the organization.

Earlier Blockchain currencies like Bitcoin are famous for their huge price changes – something that Facebook desperately wanted to avoid at Libra. Therefore, Libra will be fully covered by a reserve fund with different currencies such as the dollar, the euro and the yen. "For example, if someone buys Libra for $ 100, they will have $ 100 in reserve," Marcus explains. The Libra Association will also determine how currencies and securities held by bonds are held in reserve to maintain a stable price. Also, unlike Bitcoin, Libra is not built by the users themselves, but must be acquired from members of the alliance or on trading platforms.

Facebook leaves no doubt that Libra eventually becomes a global currency for trading At the same time, Marcus limited: "I think every new currency will take a lot of time to grow to the size of an existing national currency a big economy." To this is that in the developed world, the payment channels are already well established. "At least in the next ten years we will all receive our salaries and pay taxes in the currency of the countries we live in." At the same time, there are also countries with high inflation and poorly developed banking systems – and where a digital currency like Libra can play a much larger role "because it can provide a solution to many problems."

Facebook points to 1.7 billion people who do not have a bank account yet. Spotify also says it hopes that participation in the Libra system will enable them to better serve customers in these regions. However, there are limits to global ambitions: Libra will not be available in China.

Various suppliers will be able to create digital wallet bags to store and use Libra. Facebook just wants to be one of many wallet suppliers, but founded the network, the subsidiary Calibra with Marcus at the top. "Facebook and Calibra won't have any special rights or benefits, even though we've written all the block code and transaction code code," he said. Especially after the scandal about Cambridge Analytica Facebook is under massive pressure to improve data protection.

Users can use the Libra system under pseudonyms and have multiple access points. "Transactions do not relate to the identity of users in reality," it said in a paper.

The usual ordinance – like anti-money laundering measures – comes into force at wallet level, Marcus says. "We talked to regulators around the world." For companies that want to become the founder of the Libra Alliance, an obstacle has been raised: they must have a market value of at least one billion dollars or more than 20 million customers. Members need to invest at least $ 10 million.

Bitcoin, the most famous blockchain currency, is organized differently: that is where the units are generated by mathematical calculations on users' computers – which the jargon puts it. The total number of bitcoin that can be produced is limited. And the calculations for it are becoming increasingly complex. Meanwhile, high performance computers are needed to create Bitcoin, so commercial commemorative farms are currently the main target. This increases energy consumption and the scarce supply can cause price spurting. At the top, a bitcoin cost $ 20,000 at the end of 2017 – then the collapse followed. Meanwhile, thanks to rumors of Facebook's plans, Bitcoin has returned to more than $ 9,000. During the night of Tuesday, the price reached nearly $ 9,500.

A blockchain puts encrypted transaction data together and stores it in different locations. A comparison would make some changes noticeable, providing security. Facebook has succeeded in its system for solving known problems with technology, such as slowness. At Libra it does not come to the high energy consumption as in Bitcoin. "We have developed a blockchain that can adapt to millions of people," says Marcus. Facebook also developed a new programming language called Move for the system.

Marcus was PayPal's Pay Service Manager before joining Facebook. In the network network, he was originally responsible for the chat officer until founder and CEO Mark Zuckerberg entrusted him with the blockchain project.

Facebook's plan already makes first changes. MoneyGram, one of the international reference specialists likely to be directly affected by the Libra launch, announced a partnership with blockchain Company Ripple a few hours after the Facebook message.

MoneyGram's stock jumped 167.59 percent to $ 3.88 in US trade. The Facebook share was 0.29 percent easier at $ 188.47 from the session.

/ so / DP / jha

MENLO PARK (awp international)

Source link