Today the Libra Association announced plans for Libra, a simple global currency and financial infrastructure that can empower billions of people.
Libra will be built on a secure, scalable, and reliable blockchain; it will be backed by a reserve of assets designed to give it intrinsic value; and it will be governed by the independent Libra Association, which was formed to manage and evolve this new ecosystem.
The advent of the internet and mobile broadband has empowered billions of people globally to have access to the world’s knowledge and information, high-fidelity communications, and a wide range of lower-cost, more convenient services.
Many of these services are now accessible using a $40 smartphone from almost anywhere in the world.
This connectivity has driven economic empowerment by enabling more people to access the financial ecosystem.
Working together, technology companies and financial institutions have also found solutions to help increase economic empowerment around the world.
1.7 billion adults globally outside the financial system
Despite this progress, large swaths of the world’s population are still left behind: 1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone.
“For many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account and those numbers are worse in developing countries and even worse for women.”
Facebook statement
Blockchain and cryptocurrencies have a number of unique properties — they are decentralized, globally accessible, low cost, and safe. But the existing blockchain systems have yet to reach mainstream adoption.
Mass-market usage of existing blockchains and cryptocurrencies has been hindered by their volatility and lack of scalability.
Some projects have also aimed to disrupt the existing system and bypass regulation as opposed to innovating on compliance and regulatory fronts to improve the effectiveness of anti-money laundering.
The Libra Association believes that collaborating and innovating with the financial sector, including regulators and experts across a variety of industries, is the only way to ensure that a sustainable, secure, and trusted framework underpins this new system.
This approach can deliver a giant leap forward toward a lower-cost, more accessible, more connected global financial system.
Libra enables developers
With Libra, the group will enable developers and businesses to build new, inclusive financial service products for people all around the world.
This ecosystem will be underpinned by the Libra Blockchain, a new blockchain that has been built from the ground up to prioritize scalability, security, and reliability, as well as the flexibility required to evolve over time; and the Libra Reserve, a reserve of real assets that will back the Libra currency, providing low volatility, wide global acceptance, and fungibility.
The Libra Association will be responsible for facilitating the development of the Libra Blockchain and managing the Libra Reserve.
Libra association members
Members of the Libra Association will consist of geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions.
The initial group of organizations that will work together on finalizing the association’s charter and become “Founding Members” upon its completion are, by industry:
• Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
• Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.
• Telecommunications: Iliad, Vodafone Group
• Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
• Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
• Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking
“We are taking a particular focus on cryptocurrency and blockchain because we see their potential to expand global ecommerce and make it more frictionless and affordable for consumers – however there are many unknowns to work through. Cryptocurrency is still very much in its infancy when it comes to practical consumer application and adoption.”
Alyssa Cutright, VP, Global Payments, Billing & Risk
Over the coming months, the association and its members will be recruiting additional members to further diversify and support the network.
The group will also be raising money in a private placement to help jumpstart the ecosystem and drive adoption.
“We intend to explore unique and fully compliant financial services, that have the potential to create meaningful benefit for all people: not just for the affluent or elite, but for anyone that seeks to affordably and safely manage and move their money, and improve their financial health.”
Daniel Schulman, President PayPal
How Libra will grow
The Libra Association we will also continue engaging with regulators, policymakers, and experts to solicit feedback and ensure that this global financial infrastructure is governed in a way that is reflective of the people it serves.
The group believes this will be a significant undertaking — and responsibility — and they will continue to work openly and collaboratively as they move toward the goal of launching this new ecosystem in the first half of 2020.
As a first step, the early-stage code for the Libra Blockchain will be open sourced today under an Apache 2.0 license.
This testnet will help the Libra Association gather feedback from the community about the direction of the project and work toward ensuring a scalable, reliable, and secure launch.
READ MORE: Facebook is All Set to Launch GlobalCoin Cryptocurrency in 2020
