The long-waited Facebook cryptocurrency project Libra, will launch in January. It will be different than other digital currencies, because its value will be backed by the US dollar.
A year and a half ago Facebook wanted to launch a cryptocurrency similar to Bitcoin. A year ago a wave of Libra’s founding members (including PayPal, Mastercard, Vodafone and eBay) quit from the controversial project. Libra was also under fire for its close association with the social media network, which has faced multiple privacy scandals.
As a result, Facebook introduced changes to the project and made it a payment system similar to PayPal.
However, it seems that in January, Facebook will present a stablecoin rather than a payment system.
What is stablecoin and what can we expect from the new Facebook cryptocurrency?
Stablecoin means less volatility and fixed value. This means that the Facebook cryptocurrency will be backed by a fiat currency, in this case the US dollar. Therefore Libra would have the same value as the USD and will depend on the dollar.
The launch would take place only in the United States and in some Latin American countries. The goal is to use the currency to offer a cross-platform payment system.
The Libra project will also include a digital wallet called Novi. This wallet will make it possible for WhatsApp and Messenger users to acquire, operate, send, and receive the new Facebook cryptocurrency. Novi will not be available everywhere initially, since it needs its own license in each US state.
Libra’s exact launch date would depend on when the project receives approval to operate as a payments service from the Swiss Financial Market Supervisory Authority. It is expected that more digital currencies will follow at a later point.
Meanwhile, PayPal, which was the first founding member to drop out of the Libra project, announced last month that it would launch support for cryptocurrencies.
