Facebook has officially introduced its cryptocurrency to the world. Called Libra, it will function as a stablecoin, allowing Facebook’s two billion users to make purchases across Facebook’s various platforms by 2020.


The coin will be governed by the Libra Association, a consortium of companies including Visa, Mastercard, Uber, Spotify, Coinbase and PayPal among others

NYU Professor and Economist Nouriel Rubini, when discussing Libra, observed “It has nothing to do with blockchain” due to the coin being “fully private, controlled, centralized, verified and authorized by a small number of permissioned nodes.” While a cryptocurrency hallmark is its underlying public and permissionless distributed ledger technology (most famously the Bitcoin blockchain), Libra is more a centralized or quasi-decentralized cryptocurrency (in contrast to other cryptos like Bitcoin, Ripple, Monero and Litecoin)

The coin can be used across Facebook and Facebook-owned platforms like Whatsapp and Facebook Messenger. Users can transact with other users to make online purchases for digital and non-digital property. Possible benefits of Libra are increased efficiency and minimized transaction fees plus identity verification positives due to

Besides the Libra cryptocurrency, a second cryptoasset, called Libra Investment Tokens, will be available as a security token to investors who meet certain criteria. The token will function akin a stock, purchasable or distributable like a dividend to investors. The Facebook blockchain will be open-sourced under an Apache 2.0 license. Rather than go with a preexisting blockchain solution, Facebook developed its own and created a new programming language for the project.

The market potential is high, with Facebook’s users numbering in the billions and large swaths of the world’s population more likely to have a Facebook profile than a bank account. With as many as

Legally, Libra’s release comes at a time when Facebook is in the crosshairs of antitrust, security and privacy questions, and in an inconsistent American legal and regulatory environment regarding cryptocurrencies. The Internal Revenue Service recognizes cryptos as

Notably, the SEC’s

A lack of centralized authority was inherent (and a point of pride) in the genesis of Bitcoin, but the Wyoming Blockchain Task Force’s

Facebook and Calibra — a separate spin-off of Facebook — are members of the Libra Association. This places Facebook closer to the capital markets space as the company looks to expand beyond its social network roots. According to Long, the foundation itself is expected to act like a central banking authority by “defin[ing] and manag[ing] the assets to ensure the peg (connecting Libra to fiat value) doesn’t break.” However, having Libra’s governance in the hands of a separate foundation does purport a layer of decentralization. Credit card companies, banks and other centralized points in the lifecycle of transactions have been

Looking ahead, Libra has potential for widespread cryptocurrency usage in ways that Bitcoin and its contemporaries have yet to see. Facebook provides a unique mainstream platform and there are undoubtedly positives that may come from transacting Libra.

However, the potential exists for claims pertaining to