In 2018 Mark Zuckerberg announced the creation of a division dedicated to blockchain and David Marcus, Facebook vice president, was moved from Facebook Messenger to a new division. Confirmation that Facebook intended a cryptocurrency, known as”Global Coin” or “Facebook Coin” first emerged in 2019. Libra was formally announced on June 18, 2019 as brand-new currency tied to a basket of fiat currencies and securities. Many central banks and regulators have been concerned about this project. That’s why the Libra Association, the consortium created by Facebook, changed course and started working on several single-currency stable coins. According to a report from the Financial Times, cryptocurrency Libra could launch in January 2020.
Stable coins are cryptocurrencies that do not fluctuate in value against a specific fiat currency. This gives Libra a big advantage over bitcoin. Libra mentioned USD, EUR, GBP or SGD as base currencies for its various stable coins: 50% United States dollar, 18% Euro, 14% Japanese yen, 11% Pound sterling and 7% Singapore dollar.
Facebook will most likely launch its own Libra wallet, Novi, at the same time.
Novi is a pure Facebook project headed by David Marcus. You will be able to download a standalone Novi app on your phone. While you do not need a Facebook or WhatsApp account to create a Novi account, it will also be accessible directly in Messenger and WhatsApp — you’ll be able to tap on a button to launch a Novi menu to send and receive money through the Novi wallet. It promises instant transactions and “no hidden fees” for cross-border money transfers and local payments. It is unclear whether Novi means there will not be any fees or there will be fees but the company will be transparent about them. Novi will also act as a ramp to convert fiat money to crypto assets and cash out your cryptocurrencies to traditional fiat currencies.But the main disadvantage – only a limited set of countries will be able to access the service at first.
It difficult to say whether Libra and Novi will be successful or not as it sounds great and promising on the one hand. But, on the other hand, one similar project has already failed. It was called ‘Gram (TON)’ and held by cross-platform Telegram and Pavel Durov. Unfortunately, on May 12, 2020, Pavel Durov officially announced in his Telegram channel the closure of the TON project, which involved the use of the Gram cryptocurrency due to the fact that the court of New York banned the Gram cryptocurrency.
Taking into consideration the fact, that Libra is still awaiting approval from United States regulators, we may only wish the Libra Association all the best the and look forward to seeing how the project will be implemented.
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