Facebook Coin: A Crypto Currency Relevant for Hundreds of Millions of People in Developing and Emerging Countries

Authors: Jonas Groß, Philipp Sandner, Felix Bekemeier.

On June 18, 2019, the white paper of Facebook’s crypto currency project “Libra/Calibra” has been released. First information with respect to the vision, the goal and the implementation of the project have been published.

Key insights

• The goal is to provide a stable token backed by real assets as bank deposits and government bonds (see specific details below).
• Libra will therefore not be pegged to the USD or another traditional currency; it will therefore be “money”, but not a “currency”.
• Libra will not target the enterprise payment sector such that Libra would be used as means of payments between companies. For Libra, this would require the status of a currency. Please note that companies are required to do their accounting in EUR, USD etc.; they will not switch their accounting systems to adopt Libra.
• Facebook targets hundreds of millions users in developing/emerging countries.
• The current approx. 30 Libra partners altogether have access to >1 billion users including direct access to the “last mile” which is already installed apps on smartphones.
• Adoption will be achieved very quickly, within months after starting in Q1 2020.
• Libra will therefore…