Facebook finally announced the digital coins or (cryptocurrency) that has been developed in the past year. The cryptocurrency will be named Libra and will be launched in semester I-2020.
Simply put, Libra will become a digital token that is used for money transfers in cyberspace and shopping at Facebook partner merchants. To get and use tokens for shopping, users must buy tokens on the cryptocurrency exchange and store them in a digital wallet.
This digital wallet was developed by Facebook under the name Calibra. This digital wallet will be linked to WhatsApp and FB Messenger. Calibra will also be a standalone application for Android and iOS phones.
Libra has similarities with Bitcoin because they are both blockchain based. However, Libra also has a myriad of differences with Bitcoin.
If Bitcoin is free to circulate in the market and without managers, Libra is managed and controlled by a non-profit institution called the Libra Association. This institution is based in Geneva, Switzerland, and has 28 members including Facebook, PayPal, Uber, Mastercard to Visa.
To become a member of the Libra Association, prospective members must deposit US $ 10 million. This Libra will function like a central bank. According to the published White Paper, before being published in semester I-2020, membership is targeted to be 100 entities.
The Bitcoin exchange rate is very volatile because the price mechanism is left to the market. Libra coin prices will be more stable because the exchange rate is associated with official currencies such as the United States dollar (US), euro, and yen. For example, US $ 1 equals Rp. 14,300 then 1 Libra coin will be equivalent to Rp. 14,300.
Bitcoin does not have the basic assets that guarantee it, Libra does. Libra’s basic assets include bank deposits and short-term securities and are held by the network of custodians controlled by the Libra Association. The existence of this basic asset is to gain the trust of users because Libra cannot be used for speculation like in Bitcoin.
In terms of privacy and security, Bitcoin can be traded anonymously while Libra cannot. Because the transaction must use Calibra and the user must go through the process of “know your customer”. This process is the process of verifying the user’s identity to prevent crime in the financial sector.
That means whoever registers must register a government-issued official ID and other personal information.