In line with the white-paper, Facebook’s upcoming stablecoin, named “libra,” will be operating on the native & scalable Libra blockchain, and is backed by a reserve of assets seemingly “designed top provide it an intrinsic value” and mitigate volatility fluctuations.
These assets embody a basket of bank deposits and short-run government securities that will be managed within the ‘Libra Reserve‘ for every Libra that’s issued.
The new ‘cryptocurrency‘ will be managed by a not-for-profit, Switzerland-based consortium named the ‘Libra Association’ – that counts Mastercard, PayPal, Visa, Stripe, eBay, Coinbase, Andreessen Horowitz along with Uber among its ‘partners‘.
Facebook seemingly plans to expand the association to over a hundred members by the time of Libra’s launch within the 1st half of 2020. The white-paper adds:
“While final decision-making authority is with the association, Facebook is anticipated to keep up a leadership role via 2019. Facebook created Calibra, a regulated subsidiary, to confirm separation between social and monetary information and to make and operate services on its behalf on prime of the Libra network.”
The Libra Association is itself ruled by the Libra Association Council. The council’s members are the primary members, every of that runs a validator node on the network and was notably needed to make a minimum investment of around $10 Mln to seal the position. Every $10 Mln investment secures an entity 1 vote on the council, as per Facebook.
Facebook has additionally released the launching of the Libra Investment Token – which is indeed very different from its global user-oriented cryptocurrency libra – that can be purchased or distributed as dividends to the association’s founding members and authorized investors.
As libra isn’t technically pegged to any given national native currency, the white paper adds that users won’t always be able to redeem the token for a set quantity of fiat, though Facebook claims that the reserve assets are chosen so as to reduce the volatility.
While the assets are seemingly managed by “a geographically distributed network of custodians” so as to secure decentralization, the reserve is managed by the association itself, that is the solely party able to mint and destroy the coin.
New libra are minted once approved resellers have purchased the coins from the association with enough fiat to completely back their price, and burned once approved resellers sell the token back to the association in exchange for the underlying assets. Explaining further, the paper adds:
“Since approved resellers will always be able to sell Libra coins to the reserve at a price adequate to the worth of the basket, the Libra Reserve acts as a ‘buyer of last resort.’”
Facebook also outlines that the code that implements the Libra ‘blockchain‘ is open-source so as to form a more practical ecosystem of financial services and broaden inclusion.
Earlier reports had ‘indicated‘ that the coin will facilitate payments across Facebook’ numerous platforms including WhatsApp, Messenger and Instagram, giving the new coin ‘potential exposure‘ to a combined 2.7 Bln users every month.