is aproposed by the Americansocial mediacompanyFacebook. The project, currency and transactions are to be managed andcryptographically entrustedto the Libra Association, a membership organization founded by Facebooks subsidiary Calibra and 27 others acrosspayment, technology,telecommunicationonline marketplaceventure capitalandnonprofits. The currency and network do not yet exist, and only rudimentary experimental code has been released.

Morgan Beller started working on cryptocurrency and blockchain at Facebook in 2017, and was initially the only person working on Facebooks blockchain initiative.4

Facebook vice presidentDavid A. Marcusmoved fromFacebook Messengerto a new blockchain division in May 2018.5First reports of Facebook planning acryptocurrency, with Marcus in charge, emerged a few days later.6By February 2019, there were more than 50 engineers working on the project.7

Confirmation that Facebook intended a cryptocurrency first emerged in May 2019.8At this time it was known as GlobalCoin or Facebook Coin.9

Libra was formally announced on June 18, 2019.1011The creators of the coin are listed as Morgan Beller, David Marcus and Kevin Weil.4

A first version is projected to be released in 2020.12

On July 15, 2019, Facebook announced the currency will not launch until all regulatory concerns have been met and Libra has the appropriate approvals.13

In a meeting with top Senate Democratic leaders on September 18, 2019, Facebook chief executive Mark Zuckerberg told lawmakers that Libra would not be launched anywhere in the world without first obtaining approval from United States regulators.14

The plan is for the Libra token to be backed by financial assets such as abasket of currencies,15andUS Treasury securitiesin an attempt to avoidvolatility.16Facebook has announced that each of the partners will inject an initialUS$10 million, so Libra hasfull asset backingon the day it opens.17

Libra service partners, within the Libra Association, will create new Libra currency units based on demand.17Libra currency units will be retired as they are redeemed for conventional currency.

Initialreconciliationof transactions will be performed at each service partner, and the blockchainsdistributed ledgerwill be used for reconciliation between service partners.18The intent is to help prevent everyone but members of the Libra Association from trying to extract and analyse data from the distributed ledger.

In contrast to cryptocurrencies such asbitcoinwhich usepermissionless blockchains, Libra is not decentralized, relying ontrustin the Libra Association as a de factocentral bank.19.

In September, Facebook announced that the reserve basket would be made up of: 50%United States dollar, 18%Euro, 14%Japanese yen, 11%Pound sterlingand 7%Singapore dollar.20

Facebook had previously established theLibra Associationto oversee the currency, founded by 28 members inGeneva, Switzerland:21

Technology andmarketplacesBooking HoldingseBayFacebooks subsidiary

Blockchain: Anchorage, Bison Trails,CoinbaseXapo

Venture capitalAndreessen HorowitzBreakthrough Initiatives, Ribbit Capital,Thrive CapitalUnion Square Ventures

Nonprofitand multilateral organizations, and academic institutions:Creative Destruction LabKivaMercy CorpsWomens World Banking

The association hopes to grow to 100 members with an equal vote, while Facebook expects to maintain a leadership role through 2019.23

Visa chairman and CEO Alfred F. Kelly clarified in Visas Q3 2019 earnings call that Visa had not joined as yet, but had signed a nonbinding letter of intent; and that no one has yet officially joined. He said that factors determining whether Visa would, in fact, join included the ability of the association to satisfy all the requisite regulatory requirements.24

By August 2019, three listed members were considering leaving the Libra Association, as they were concerned about the degree of regulatory attention upon Libra.25

The project has faced criticism2627and opposition from central banks.28The use of a cryptocurrency and blockchain for theimplementationhas been questioned.22

US regulators and politicians expressed concerns close on the mid-2019 announcement.Maxine Waters, Chairperson of theUnited States House Committee on Financial ServicesCommittee asked Facebook to halt the development and launch of Libra, citing a list of recent scandals and that the cryptocurrency market currently lacks a clear regulatory framework.29The U.S. House Committee on Financial Services Democrats sent a letter to Facebook asking the company to stop development of Libra, citing concerns of privacy,national security, trading, andmonetary policy.30

Jerome Powell, chair of theFederal Reserve, testified before Congress on 10 July that the Fed had serious concerns as to how Libra would deal with money laundering, consumer protection and financial stability.31

Presidenton 12 July that If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.32

In September 2019, French finance minister Bruno Le Maire stated that the nation wont allow development of the cryptocurrency in Europe as it is a threat to the monetary sovereignty of nations. He also spoke about the potential for abuse of marketing dominance and systemic financial risks as reasons for not allowing cryptocurrency in Europe.33

French Finance Minister,Bruno Le Maire, told French radio stationEurope 1that Libra could not be allowed to become a sovereign currency. He warnedFrench Parliamentof his concerns about Libra and privacy, money laundering and terrorism finance. He called on the central bank governors of theGroup of Sevento prepare a report on Facebooks plans.28

Bank of England governorMark Carneysaid there was a need to keep an open mind about new technology for money transfers, but anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation.28

Germanwarned that Facebook could become ashadow bank.28

The government of Japan has begun the process of investigating Libra and doing an analysis on the effect on Japans monetary policy and financial regulation. This will be done before the Group of Seven meeting in France between 2426 August 2019.34

The SwissFederal Data Protection and Information Commissioner, that David Marcus told the US Senate would oversee privacy for Libra, said that it had not heard from Facebook at all.35

Data protection regulators internationally issued a statement36asking Facebook to protect personal data of users, and to detail Libras planned practices for handling personal data, in the light of previous episodes where Facebooks handling of peoples information has not met the expectations of regulators, or their own users.37

Finance Watchdescribes Libra as a huge risk to public monetary sovereignty38and concludes that Libra is a bad idea for its users, for the stability of our financial system, and last but not least for our democracy.39

On September 16, 2019, officials from the Libra consortium, including J.P. Morgan and Facebook, met with officials from 26central banks, including the Federal Reserve andBank of England, inBasel, Switzerlandand the meeting was chaired byEuropean Central Bankboard memberBenoît Cœur, a vocal Libra critic.40

Industry observers have speculated whether Libra will provide meaningful privacy to its users.41Facebooks plan is to let its subsidiary Calibra manage Libra for Facebook users, and Facebook executives have stated that Calibra will not share account holders purchase information with Facebook without authorization.42However, the system is also planned to include a friend-finder search function, and the use of this function will constitute permission for Calibra to combine the account holders transaction history with their Facebook account.18

Facebook tries to police inaccurate information and fake Libra websites on its platform.43

Libra will not rely oncryptocurrency mining.22Only members of the Libra Association will be able to process transactions via thepermissioned blockchain.

Libra hopes to begin transitioning to a permissionlessproof-of-stakesystem within five years;11although their own materials admit that no solution exists that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network.442

Librassource codeis written inRustand published asopen sourceunder theApache Licensewith the launch on 18 June 2019.

Elaine Ou, an opinion writer atBloomberg News, triedcompilingand running the publicly released code for Libra. As supplied, the software did little more than allow fake coins to be put in a wallet; almost none of the functionality outlined in the white paper is implemented, including major architectural features that have yet to be invented. Ou was surprised that Facebook would release software in such a state.2

Facebook plans to release adigital walletcalled Calibra in 2020, made available in Messenger,WhatsApp, as well as in a standalone app.3

Move is the Libra blockchains proposedsmart contractand custom transactions language. It is planned to be astatically-typedprogramming language, compiled tobytecode.

The Move language syntax has not been released yet. An exampleIntermediate representationof the language is shown in the Move white paper:45

FloozandBeenz- earlier attempts at internet-wide digital currencies led by US companies

Ou, Elaine (20 June 2019).I Tried Using Facebooks Libra Blockchain. It Didnt Work.

Facebooks Calibra cryptocurrency wallet launches in 2020.

Rodriguez, Salvador (20 July et Morgan Beller, the 26-year-old woman behind Facebooks plan to make its own currency.

Liao, Shannon (2018-05-08).Facebook is creating a mysterious blockchain division.

Gartenberg, Chaim (2018-05-11).Facebook reportedly plans to launch its own cryptocurrency.

Popper, Nathaniel; Isaac, Mike (2019-02-28).Facebook and Telegram Are Hoping to Succeed Where Bitcoin Failed.

Andriotis, AnnaMaria; Hoffman, Liz; Rudegeair, Peter; Horwitz, Jeff (2 May 2019).

Facebook Building Cryptocurrency-Based Payments System

Social Media Monopolies and Cryptocurrencies: Facebooks Proposed Coin.Cybersecurity, Privacy, & Networks eJournal. Social Science Research Network. (SSRN). Accessed June 19, 2019.

Isaac, Mike; Popper, Nathaniel (18 June 2019).Facebook Plans Global Financial System Based on Cryptocurrency.

Constine, Josh (18 June 2019).Facebook announces Libra cryptocurrency: All you need to knowTechCrunch

Facebook Unveils Libra Cryptocurrency, Sets Launch For 2020.

Bain, Ben; Weinstein, Austin (2019-07-16).Facebook Says Libra Wont Launch Until Regulators Satisfied.

Romm, Tony (2019-09-19).Facebooks Mark Zuckerberg seeks to reassure wary lawmakers about Libra, elections in rare D.C. trip.

Caroline Binham, Chris Giles, and David Keohane (June 18, 2019).Facebooks Libra currency draws instant response from regulators.

Duffy, Clare.Facebook wants to make cryptocurrency mainstream. Heres how.

Jeff John Roberts (2019-06-18).Facebook Announces Project Libra, Its Wildly Ambitious Plan to Bring Cryptocurrency to the Masses.

The Libra blockchainlike other blockchainswill provide a tamper-proof record of transactions on the network. But, unlike Bitcoin and other public blockchains, only authorized bodiesin this case, foundation memberswill be allowed to run a node.

Robert Hackett (2019-06-18).Facebook Cryptocurrency: Calibras Privacy Implications.

People who use Calibra will have to trust Facebooks internal firewalls and security measures, of course. And theres a lot of data here that hackers and snoops might like to access. In order to abide by standard know-your-customer and anti-money laundering laws, Calibra will have to verify peoples identities through a thorough process, collecting government-issued IDs and other personal details and documentation. It will be incumbent upon Calibra to keep this data confidential and secure.

Brandom, Russell (June 18, 2019).Facebooks cryptocurrency has a trust problem.

Facebooks Libra currency will get half its backing from the US dollar.

Libra Association A not-for-profit organization.

Cellan-Jones, Rory (June 18, 2019).Why Facebook wants to be moneys future.

Morse, Andrew.Heres what you need to know about Libra, Facebooks cryptocurrency.

Visa, Inc. (V) Q3 2019 Earnings Call: Corrected Transcript

Murphy, Hannah; Bond, Shannon (23 August 2019).Facebooks Libra backers look to distance themselves from project.

Zuckerberg: The man who would be monetary king

Marsh, Alastair (18 June 2019).France Calls for Central Bank Review of Facebook TokenBloomberg News

Wong, Queenie lawmaker wants Facebook to halt its Libra cryptocurrency project.

Committee Democrats Call on Facebook to Halt Cryptocurrency Plans. U.S. House Committee on Financial Services Democrats. 2019-07-02.Archivedfrom the original on 2019-07-03

Popper, Nathaniel; Isaac, Mike; Smialek, Jeanna (2019-07-10).Fed Chair Raises Serious Concerns About Facebooks Cryptocurrency Project.

Murphy, Hannah (12 July 2019).Donald Trump hits out at Facebooks Libra and bitcoin.

France Finance Minister Calls Facebook Libra a Threat to Monetary Sovereignty

Hill, Paul (2019-07-13).Japan becomes the latest country to investigate Facebooks Libra.

Schulze, Elizabeth (July 16, 2019).Swiss group thats supposed to oversee privacy for Libra says it hasnt heard from Facebook at all.

Joint statement on global privacy expectations of the Libra network

Murphy, Hannah (5 August 2019).Facebooks cryptocurrency raises privacy questions, say regulators.

Grandjean, Pablo (2019-08-14).Dont let Facebook take over the financial system.

Stiefmller, Christian M. (2019-07-22).Libra: Heads I win tails you lose

Browne, Ryan (2019-09-16).Facebook and JP Morgan meet with global central banks to discuss cryptocurrencies.

Jeff John Roberts (2019-06-18).Facebooks Project Libra: 5 Things to Know About the Cryptocurrency.

So, in theory, only Calibra will have a record of your transactions. But many Calibra users may decide to use its integrated Facebook friend-finding feature, and if they do, their data will be combined.

Jacob Passy (2019-06-19).Why Facebooks Libra coin could become a big pain in your wallet.

Libra will be a stablecoin, linked to the value of other currencies, unlike other cryptocurrencies like bitcoin BTC, -4.27% Consumers who use Facebooks Messenger service, WhatsApp or a stand-alone app will be able to access Libra through a digital wallet managed by new Facebook subsidiary Calibra.

Analysis The Technology 202: Libra fakes undermine Facebooks cryptocurrency charm offensive.

Libra White Paper Blockchain, Association, Reserve.

Move: A Language With Programmable Resources Libra.

Cryptocurrency bubble2018 cryptocurrency crash)

Nick Clegg(VP of Global Affairs and Communications)

Ted Ullyot(VP, General Counsel, and Secretary)

Elliot Schrage(VP of Global Communications, Marketing and Public Policy)

This page was last edited on 29 September 2019, at 07:55

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