Do you have a bank account? If not, you are not alone. 1.7 billion adults throughout the world have no access to a traditional bank. Most are locked out of the financial system because of high interest rates, insufficient funding, overdraft charges, and ATM fees. However, 1 billion adults also own a mobile phone and almost half a billion have internet access. Enter libra cryptocurrency: the Libra Association’s proposal to solve this international banking crisis.
Backed by Facebook, Uber, Lyft, and 18 other companies, libra cryptocurrency aims to bridge the financial gap by providing a decentralized form of digital currency. This system would bypass the harsh restrictions of traditional banking. Mark Zuckerberg believes that sending money online should be “as simple as sending photos.” Anyone with an internet connection will have open access to stable finances. Its open source software also allows developers across the globe to freely contribute their knowledge to the project in the spirit of collaboration.
The Vision: Bridging the Financial Gap
The Libra Association, a nonprofit organization with headquarters in Switzerland, plans to empower billions of people by promoting financial inclusion with its own blockchain. Libra will be a “stablecoin” backed by a reserve of real assets- similar to how the US dollar was backed by gold until 1971. Both buyers and sellers will be covered by reserve assets such as bank deposits and government securities from reputable central banks. Users will not have to worry about drastic price fluctuations. By collaborating and innovating with the financial sector, libra can avoid issues like money laundering and be able to scale sustainably.
Libra cryptocurrency is projected to be launched in the 1st half of 2020. With enough support, the Libra Association hopes to move from being a permissioned network with validation done by its founding members to a permissionless network self-sustained by its users.
What do you think of this new cryptocurrency? Do you see yourself investing in this stablecoin or would you rather stick to the original digital currencies? Join the conversation about libra on our community forum.