The coin is set to go live in 2020 and has already garnered a nickname, “Zuck Bucks” named after Facebook founder; Mark Zuckerberg. To pull off this project, Facebook will partner with 27 companies including Lyft, PayPal, Uber, and Visa with the tag line of “"Reinvent money. Transform the global economy." Libra’s main goal is to make it easier to spend money around the world. The currency will be aimed at those who do not have access to a bank account or credit cards, or who are “unbanked.” Consumers would be able to use the cryptocurrency on Facebook as well as through the other 27 businesses that make up the Libra Association.
Some experts see this as a logical move that will bring cryptocurrencies further into the public than it already is; setting the stage for cryptocurrencies to become a popular method of payment. In an email exchange with Barron’s; Gabor Gurbacs, Director of Digital Asset Strategy at VanEck/MVIS mused, “The introduction of Libra is positive for the crypto-space as it recruits many large financial and tech companies to a digital asset experiment.” He’s not the only one to see the value of Libra. RBC Capital Markets analyst Mark Mahaney notes, “In terms of scale and importance, we believe this new financial infrastructure could be viewed similar to Apple’s introduction of iOS to developers over a decade ago.”
Not everyone has positive reviews when it comes to Facebook’s new currency, while others are more hesitant due to Facebook’s less than stellar track record of both data and privacy breaches. Los Angeles Times asks, “You don’t trust Facebook to protect your privacy. Why trust it as a banker?” Felix Salmon from AXIOS, wrote an entire article on the problems that Libra will cause telling readers; “Don’t bother worrying about Libra.”
The biggest problem facing Libra is the risk that it could take down the global economy. Yes you read that correctly – the entire global economy. In an opinion piece for MarketWatch, Katharina Pistor, a professor of comparative law at Columbia Law School wrote, “The idea of a private, frictionless payment system with 2.6 billion active users may sound attractive. But as every banker and monetary policy maker knows, payment systems require a level of liquidity backstopping that no private entity can provide.” She advises that the government steps in now and stops Project Libra from ever seeing the light of day.
Despite the cautious attitudes of many, Project Libra is steamrolling ahead. Only time will tell if it will rival the likes of Bitcoin or surpass its success altogether. As a Facebook user would you purchase Libra?
