Facebook’s New cryptocurrency: Libra’s features and challenges

Features and Challenges of Facebook Libra.
Have you heard of the Facebook Libra? A quick summary of  

Libra is a cryptocurrency by Facebook with the aim of “Transforming the global economy”.  Its users will be able to send the currency within the Facebook Messenger app and WhatsApp as an intermediary for transferring traditional currencies. A subsidiary company from facebook “Calibra” will be charged with developing products and services around libra.

Libra will be managed by other bodies as well facebook who owns only one vote (like its 27 counterparts) in the company (Calibra). Unlike the bitcoin, Libra will be regulated i.e a stable coin (no increase or decrease in the currency’s rates)

Now that we are all caught up, let’s take a look at what the future holds for “Libra”.

With its reserve of assets (resources from companies like Uber, Lyft, Spotify) and back up of major payment processors like Visa and MasterCard, Libra has quite the challenge ahead of it.

First

is the issues of convincing its current audience to subscribe to the use of Libra. With about 1.7 billion people without a bank account and over 70% of that population owning a mobile device and can easily make use of the advantages of Libra. However, there are challenges in paying with any form of cryptocurrency. One, every currency has its own value which differs from other currency. Hence, translating the value of perhaps the Naira to Libra (Which is expected to be of the same value with the Dollar), would basically just mean putting up the amount of value for one Dollar in Naira.

This has always been the norm when making transactions cutting across currencies. Libra as far as the announced features go does not speak to this. It only makes the process easy as there will touchpoints with users both physically and electronically for getting Libra. That is not all, you get paid in your country’s regular currency, then convert to Libra, and then finally you hope that whatever product or service you are paying for accepts Libra.

Secondly,

the term cryptocurrency suggests a platform of irregularity in the value of the coin. Hence, a bid for investment comes with the territory. Facebook’s Libra, however, throws this whole logic out the window. While this assures security to users, it is basically what banks offer.

Although this regularity comes with its own advantages compared to the bitcoin. Such advantage includes paying for products and services online without having to wonder if the value of the currency will rise or drop in the future. 

Another challenge here

is Facebook’s long history of “Violating Privacy”. This is no news to Facebook users and has led to a loss of trust. Now, bringing these people in to trust in on a financial platform will needless to say be difficult. 

Despite all its challenges, Libra is quite the initiative and will accomplish quite a lot of positive if and when approved. And Facebook bent on making a profit in the long run from their ad business. This will definitely be the bane of the exploitative remittance service charges(worth $50 billion dollars annually).

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