Libra is a blockchain-based payment system and blockchain-based digital cryptocurrency, proposed by the leading Social media company Facebook.
What is Cryptocurrency?
A cryptocurrency is a digital asset that works as an exchange medium through which coin ownership stored in a ledger in a form of a computerized database using strong cryptography. It does not exist in physical form and is not issued by central banks or authorities of a country. The 1st decentralized cryptocurrency, Bitcoin was released in the year 2009.
Libra Cryptocurrency to be launched in January 2021
- As per recent media reports, the Libra cryptocurrency is expected to be launched in the beginning of next year, as a single digital coin, backed by the dollar.
- The management and transactions would be carried out through the ‘Libra association’ based in Geneva, which has 27 members from various sectors including Technology, Finance, and Venture capital.
- When it was originally announced by Facebook in the year 2019, the plan was that the Libra token would be backed by financial assets such as a basket of currencies and US Treasury securities, so that volatility can be avoided.
- The Libra Association is seeking approval from FINMA to issue a series of stable coins. These stable coins are designed to be less volatile.
Unlike cryptocurrencies such as bitcoin which uses permission-less blockchains, Libra is not decentralized. Members of the Libra association can process transactions by permissioned blockchains.
Swiss Financial Market Supervisory Authority (FINMA)
The Swiss Financial Market Supervisory Authority (FINMA) is a government body of Switzerland for financial regulation. It is headquartered in Bern, Switzerland.