Libra: A New Currency


The following notes are based on a quick read of Libra.org. The image above is a snippet from the whitepaper of Libra's Move programming language.

New Currency
  • Not long ago, texting costs USD 0.16 per message of 160 characters.
  • Now, you can send text, images and videos freely (with a data plan).
  • Exchange of information has progressed but the exchange of money hasn't.
  • Ditto finance, banking, capital and inclusion.
  • Facebook proposes to address these via a new currency named Libra.
  • In an internet of money, currency transactions can be as quick and frictionless as instant messaging.

Features
  • Libra will be a blockchain-based, stable, crypto currency.
  • It will be backed by bank deposits and securities.
  • This backing is used as a reserve, not a peg [vs Tether 1:1 with the USD].
  • The reserve will be kept by multiple custodians [perhaps multiple countries].
  • The reserve and its mix are intended to provide stability to Libra, even in the event of a financial crisis.
  • Interests and dividends from the reserve will be used to fund the operations of Libra and reward the initial investors of Libra.
  • Libra will offer two tokens: an investment token [perhaps a STO that is restricted to accredited investors] to seed its operations, and Libra itself which is purchasable by the public.
  • The public will be able to buy Libra from resellers and exchange it for fiat at exchanges.
  • The Libra blockchain will allow smart contracts.
  • Smart contracts will be programmable using a new language called Move that is intended to make contracts easier to program and be more robust.

Libra Association
  • Libra - the blockchain, currency and reserve - will be governed by an association (not dissimilar to a central bank), headquartered in Geneva, which will issue Libra (when fiat is presented) or withdraw it (when cash out to fiat).
  • But unlike central banks, it can't 'print money' because each Libra issued must be backed by fiat.
  • The 28 founding members of the Libra Association are listed below.
  • The association is open to more members. To join: an organisation must have a market value of USD 1 billion or more, have USD 0.5 billion in customer deposits, reach 20 million people a year and be in the Top 100 (eg. top 100 in Fortune 500), or as an academic institution be ranked Top 100 in QS and CS.

Founding Members