The Libra Association, a 28 company, non-profit organization led by Facebook announced an intent to launch a digital currency or cryptocurrency on the internet. The cryptocurrency, called the Libra, would be a price-stable digital asset tied to a basket of fiat currency holdings in a sort of globally shared bank called the Libra Reserve. 28 founding members, companies that include the likes of Uber, Spotify, Mastercard and various nonprofits like Kiva, Mercy Corps and Women’s World Banking would be in charge of the Libra Reserve, the main responsibility of which would be ensuring that all Libra currency circulating on the market was backed with an equivalent amount of fiat deposits at the Libra Reserve.
The fiat currency deposits in the Libra Reserve would consist of a basket of proven, price-stable assets like the British Pound, the Euro, the US Dollar and the Japanese Yen but it could change if the founding members, which will be at least 100 large companies and organizations by the time of launch, democratically voted to change its holdings.
If the Libra Association manages to do what it says it’s going to do, we could have the first universally trade-able, price-stable currency to use in global digital commerce. A currency that takes all the good things about fiat currencies, like their relative stability and digitizes it into a cryptocurrency format, which allows for the exchange of value on a global and instantaneous scale. Libra would work like a message on your phone does. Anyone on earth with access to the Internet or a cheap mobile smartphone could suddenly engage in global internet commerce.
The Libra project is still in it’s infancy and may never launch unless the world is ready for it. It’s going to take massive coordination across the largest governments and companies around the world. It’s a moonshot idea. But if bitcoin was founded on the principles of offering individuals better access to financial resources, then isn’t Libra following in those footsteps? Shouldn’t everyone have a right to take part in the global, internet economy? We can only wait and see how it all plays out.
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