Facebook: Libya will become the first global currency 2

Facebook: Libya will become the first global currency

money Currencies

Facebook's Libra will become the first global currency

| Reading time: 4 minutes

Daniel Eckert

DOCUMENT - 17.06.2019, ---, -: An undated photo provided by Facebook shows the lettering and logo of the Libra. Facebook has invented a new global currency and hopes to reach billions of users around the world. The digital currency with the name "Balance" is similar to the Bitcoin of so-called blockchain technology, but should be without price fluctuations. Photo: Facebook / dpa - Attention: only for editorial use and only with full mention of the credits above +++ dpa-Bildfunk +++ DOCUMENT - 17.06.2019, ---, -: An undated photo provided by Facebook shows the lettering and logo of the Libra. Facebook has invented a new global currency and hopes to reach billions of users around the world. The digital currency with the name "Balance" is similar to the Bitcoin of so-called blockchain technology, but should be without price fluctuations. Photo: Facebook / dpa - Attention: only for editorial use and only with full mention of the credits above +++ dpa-Bildfunk +++

The lettering and the logo of the Balance. In the future, billions of Facebook users can pay with

Source: dpa

Facebook brings its own motto Libra with the promise made to the market to be a valid motto worldwide. Unlike Bitcoin, the price will not fluctuate as much. But Facebook's money also has a big disadvantage.

reHis claim is huge: nothing less than "reinventing money" wants Facebook to have its own currency. Already next year, Libra, so the means of payment of the Internet company are now officially introduced.

And it continues: The digital currency will be valid in all countries of the world. According to the social network, Libra can then be easily sent to other users for various applications, including Messenger and WhatsApp, with the introduction of its own application called Calibra.

Libra will be convertible into legal tender such as euros or dollars, says Facebook. It would be the first truly global currency in history.

"Libra is built on a secure, scalable and reliable blockchain and is designed to give all citizens of the world equal access to financial services," said Facebook subsidiary Calibra's website, which manages payments in Libra.

First version of Calibra application

First version of Calibra application

Source: Facebook Calibra

Thus, Facebook's money joins the range of cryptocurrencies, some of which have been around for years. But many things are different from Bitcoin, for example, the first functional application of blockchain technology in the financial sector.

Introduced in 2009, Bitcoin, the first fully digital money, allowed the transfer of assets outside the financial system. Then come more than 2,000 other virtual coins, including Ethereum, Ripple and Bitcoin, from Bitcoin Cash and Bitcoin SV. In fact, these Internet currencies are rarely used to pay. And this is mainly due to one circumstance: the prices often fluctuate violently.

Facebook: Libya will become the first global currency 3

Source: Infographic World

For example, if you want to pay a TV with Bitcoin Cash, you have to expect the device to cost two units today, ten percent more tomorrow and maybe ten percent less tomorrow. Only very few consumers face this volatility.

Facebook's motto should be different. Libra is similar to Bitcoin on Blockchain technology, unlike Bitcoin, but coupled with other legal offerings such as the euro and the dollar or other safe investments. Experts talk about the stable room, a stable digital room.

Libra becomes a stable currency

On Calibra's side, the Libra Reserve would be a set of currencies and other assets "used as a backup for any new Libra to build confidence in its intrinsic value". The store of value is designed to keep the price stable. For example, the euro has fluctuated only from $ 1.11 to $ 1.18 in the last twelve months.

Facebook: Libya will become the first global currency 4

Source: Infographic World

"The announcement of Facebook has great potential," said Danyal Bayaz, a member of the Greens and Finance Committee. Today, a digital payment method could be used by many people in the near future.

Until now, the distribution is limited to Bitcoin and other crypto-currencies, which are currently rather speculative instruments. This increases the pressure on central banks and financial regulators to deal seriously and comprehensively with digital currencies.

The transaction fees for Libra transfers will be low and transparent, promises Facebook. This is also true especially when the money is shipped overseas. This is probably the main potential.

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While Germany, like many other industrialized countries, knows too much about banks, billions of people in emerging markets do not have enough access to financial services.

Many observers question the data security of users in relation to Libra. To reassure critics, Facebook has separated Libra and entrusted it to a foundation based in Switzerland. Partners include major payment companies such as Mastercard, Visa and Paypal.

For Bayaz, many questions about the fight against black money as well as the protection of consumers and investors are not yet clarified. It was also necessary to ask whether the right to withdraw new money outside the banking sector could become a risk to financial stability. "The design of a digital currency should therefore not be entrusted to a private company that is not yet subject to financial supervision."

In Europe, the Facebook stock is Tuesday afternoon of four percent and up.