Meta: The Libra Association

With extensive experience as an electrical/software/coding engineer along with having a diverse financial background, Thomas Wettermann’s areas of interest include Machine Learning (ML), artificial intelligence (AI), and Financial Technology (FinTech). For the past few years, Thomas Wettermann has focused on the underlying technologies that support and promote all phases of cryptocurrency, Web 3.0, and metaverse ecosystems.

Facebook: Shutterstock

Since May 2019, Facebook has been desperately trying to get its own cryptocurrency after it first floated ideas for a “Global Coin” or “Facebook Coin.” Then, in June of 2019, Facebook formally announced its “Libra” cryptocurrency project.

But now after three years of regulatory and legislative scrutiny, multiple rebranding efforts, and an exodus of key crypto executives, it appears that Facebook (now Meta) faces major obstacles in introducing its cryptocurrency.

Libra: The Coin

In June 2019, Facebook released its first Whitepaper detailing its proposed world cryptocurrency called “Libra.” One of the main problems Libra seeks to address is how much it costs for individuals in developing countries to move money. In these developing countries, individuals often pay exorbitant transfer charges.

Libra was conceived to be a cryptocurrency that could be used anywhere in the world with a goal to foster more access to “better, cheaper, and open financial services.” With Libra, consumers could send money to each other as well as pay for goods and services using Facebook-backed digital currency instead of their local currency.

Facebook’s Libra

According to the original Whitepaper, Libra tokens were to be monitored and kept track of by the not-for-profit organization Libra Association. The association guarantees that Libra is financially backed by several global currencies and securities.

This basket of securities was originally to include the following mix: 50% United States dollar, 18% Euro, 14% Japanese yen, 11% Pound sterling, and 7% Singapore dollar. It was believed that such a mix would bring price stability to Libra.

Calibra: The Digital Wallet

Libra needed a digital wallet to purchase, hold, and manage these tokens. To manage Libra, users would be able to download a digital wallet named Calibra. This wallet was intended to allow users to send this global coin to anyone with a smartphone.

By 2020, Facebook had wanted the Calibra wallet to be available in Messenger, WhatsApp, and as a standalone application. The Facebook Whitepaper stated that “almost anybody” in the world with a smartphone will be able to download the digital wallet app. As the world’s largest media platform, Facebook had about 2.5 billion users in 2020.

Libra’s Underlying Technology

The Libra cryptocurrency was structured to use a form of “centralized” blockchain technology. This technology was different from Bitcoin’s fully decentralized blockchain. With Libra, only members of the Libra Association were able to access the electronic ledger of Libra transactions.

The Libra Association

Rather than have Facebook manage this currency, Facebook established the Libra Association. Libra would be governed by the Libra Association which was an association based in Geneva, Switzerland, and was primarily responsible for developing and operating the payment system with a secure network via blockchain. The founding members of the Libra Association consisted of 28 global companies including major payments providers and tech heavyweights including Visa, Mastercard, Uber, Stripe, and PayPal.

The Libra Association was a not-for-profit organization, acting independently of any single member organization. The Association is chartered to validate all transactions on the Libra blockchain and also monitors all Libra finances.

Initially, the Libra Association was established to have a governing body called the Libra Association Council. This Council included a representative from each member of the Libra Association, which would vote on policy and operating decisions.

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