One year ago, Facebook announced its new digital currency, called Libra technically owned by the Libra Association, a separate entity set up in Switzerland, which now includes 27 members: mostly tech companies like Uber and Spotify, and VC firms like Andreessen Horowitz and Union Square Ventures.
The Libra project has slowly moved forward been mired in scrutiny from financial regulators.in contrast to Facebook’s slogan“move fast and break things. Specifically, now it’s stated it’s not a Facebook project, but it started at Facebook which has over 2.5 billion users -a third of the planet.
Regulators put the brakes on the project thinking introducing a new digital currency would make Facebook a global economic superpower in its own right.
One year later, Libra has posted a new version of its white paper to address some of these concerns called Libra 2.0. Libra 2.0 looks more like a digital payment system like PayPal built on a blockchain platform. Libra “wallet” is like a bank account that you set up through Facebook.
1) Stablecoins. In the new roadmap, Libra uses Stablecoins tied to specific currencies (like a US dollar coin), in addition to the “basket” of currencies used in their original proposal. Libra will become the “meta money.”
2) Increased compliance for money laundering: you’ll be able to use Libra only by going through a “custodial wallet or exchange” or a do-it-yourself “Unhosted Wallet” which will be automated KYC/AML built-in.
3) More tightly centralized: Libra has abandoned plans to move Libra to a decentralized system in 5 years and made it a private blockchain with plans to vote more members into the Libra Association at regular intervals.
In summary, Libra will be a payment network, based on a private blockchain. It is backed by “real” currencies but it will be far easier and cheaper to transfer money than today. On investing in Libra, you can’t buy Libra today, but you can buy Facebook stock.
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