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2019 is coming to an end, and the biggest Internet controversy of the year can be said to be the digital currency Libra planned by Facebook. Facebook is preparing to make Libra a free currency that is free from the global government regulatory system, allowing netizens to make free payments and transfers, but Libra The currency has encountered criticism and doubts from regulatory authorities.

According to the latest news from foreign media, Libra is quietly advancing amid external controversy, and Facebook has begun to use Libra internally.

Libra is a "cryptocurrency" among digital currencies. Transaction data is stored in a global blockchain network composed of a large number of devices. There is no central issuing agency or central transaction database.

Cryptocurrencies exchanged for legal tender are not new, but Facebook relies on the four major social networks to have more than 2 billion users. Such a huge user scale, coupled with Facebook’s countless personal privacy violation scandals in the past, has triggered global regulatory agencies and Central bank alert.

Association funds

According to foreign media reports, the official operating organization of Libra is the Libra Association. Currently, the Libra Association is still funded by Facebook.

Founding members of the Libra Association, which includes 21 companies including Uber, Spotify and Coinbase, have yet to remit the $10 million minimum membership fee to the organization, despite past pledges to do so, a source said.

Presumably, given the current level of regulatory opposition, the founding members will first want to see if there is any real hope that the project will get off the ground.

start using

In addition, Facebook employees have already begun using Libra. Facebook previously set up the Calibra department to develop Libra digital wallets and other services. In this team, if an employee is late for a meeting, that person will be fined Libra coins, but these Libra records exist in a "test network" "There is no legal currency reserve fund support, so they are basically a small-scale monopoly currency.

"I was always late, so I kept getting fined," Kevin Ware, vice president of product for the Clibra division, told the outlet.

programming language

Previously, executives of the Libra Association stated that despite encountering some opposition, they would still advance the work of the association, including recruiting staff and starting early technology development work to build a global blockchain network in the future.

According to reports, one of Libra’s most important technologies is a new programming language called “Move,” which is designed to securely move digital assets related to the blockchain.

Sam Blackshear is a software engineer at Facebook and one of the architects of the Libra network. He said that the name of the programming language "Move" does not come from Facebook's corporate motto "Move fast and break things" (Move
Fast and Break things), Move instead refers to an esoteric programming concept called "move semantics."

ecosystem

According to Facebook's design blueprint, Libra is not affiliated with Facebook. Companies that join the association can develop their own Libra digital wallets or payment services and develop their own revenue channels. The relationship between these digital wallets is competition for users. However, relying on the huge scale of social network users, Calibra, the digital wallet being developed by Facebook, is bound to occupy an advantageous position.

According to foreign media reports, analysts believe that if Calibra allows third-party developers to build their own digital currency functions for the wallet, the business impact will be huge.

RBC Capital Markets analyst Zachary Schwarzman
"We believe this new financial infrastructure can be viewed as similar to Apple's introduction of the iOS operating system (development interface) to third-party developers 10 years ago," said Schwartzman. In other words, Calibra's importance to Facebook is Like iPhone to Apple.”

Facebook had planned to launch Libra in the middle of next year, but in the face of huge government regulatory resistance, whether this timetable is still feasible needs to be questioned.

Previously, the most important payment industry companies in the Libra Association collectively withdrew from the project, including PayPal, Mastercard, Visa, Stripe, etc. Currently, those remaining in the association are mainly Internet companies that focus on the consumption and use of Libra currency, financial Insufficient attributes.

Fed bombardment

According to foreign media reports, just this Wednesday, U.S. Federal Reserve official Lael Brainard launched a fierce attack on Facebook’s Libra digital currency project, saying that the project faces “a series of core legal and regulatory challenges,” including Clarify how the project will be tied to a basket of fiat currency assets.

Brainard said Facebook views Libra as a “stable currency” — a digital currency tied to a government-backed currency or other reliable asset to avoid the wild swings of pure cryptocurrencies like Bitcoin — that The concept remains unproven and a range of consumer rights are unclear.

Brainard: “If Facebook proceeds with its Libra plan, it will combine active users representing more than a third of the world’s population with the issuance of a private digital currency that is opaquely pegged to a basket of sovereign currencies. Without the necessary safeguards, Global-scale stable digital currency networks may pose risks to consumers.”

Central banks around the world are discussing how to manage innovation in digital financial technology, particularly the distributed ledger system used by Bitcoin, known as the blockchain network. Some analysts believe it is inevitable that central banks will eventually issue their own digital currencies.

Brainard said Libra technology has real advantages with its potential to reduce costs and speed up money transfers. But other virtual products based on legal currency also have this advantage.

Cryptocurrencies still have to clear hurdles, including the potential for fraud and their use in criminal activities such as money laundering, she said. Brainard said estimates of cryptocurrency-related theft and fraud losses have more than doubled, from $1.7 billion the previous year to about $4.4 billion in 2019.

“Given the stakes, any global payments network should meet a high threshold of legal and regulatory safeguards before operating,” she said.