Published On Aug 14, 2020
We can't talk about Stablecoins and their need in the realm of Crypto payments without talking about Libra.
In 2019, Facebook launched the white paper, detailing the Calibra association, and the associated Cryptocurrency called Libra.
The idea was to get several large financial and retail companies to contribute a minimum of $10 million to be validators and part of the network.
The network was to be a private blockchain that validated the transactions, and have a mechanism to create and stabilize a coin they called Libra.
Libra was originally to be a token whose value was based on the value of several different world currencies.
Of course, the goal is to allow us to use the Facebook platforms - Facebook, Instagram, WhatsApp - to be able to send money. Therefore, anyone with a business that runs on any of those platforms could now accept payments directly via Crypto rails, and can circumvent banks.
Mark Zuckerberg was called before the US Congress, and had to answer questions about the network, Crypto, and, of course, Facebook's use of the data.
Congress was not happy that there might be a currency to compete with the Dollar, and they certainly weren't happy that it might come from Facebook, who has a history of selling client data.
In 2020, Calibra released a new whitepaper with changes.
They are going to have several stablecoins, all pegged to different world currencies. LUSD, LEUR, LGBP. They will all be backed with reserves of those currencies.
Then the Libra will be a Smart Contract that is a weighted blend of all the reserve currencies. The weighting will be determined somewhat by the members, but also by bankers.
This is not the original goal Facebook and Calibra had in mind. However, we will see if their huge network can help them get over the limitations imposed by Congress.
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