Facebook’s June 18th announcement about the launch of its global cryptocurrency Libra immediately made waves in the payments and banking industry. Backed by major players like Mastercard, Visa, Uber, Lyft, Paypal, Spotify, ebay, and Stripe, many are wondering if Libra might scale and disrupt at a pace never before seen in our industry. We condensed our research into a short brief covering what Libra is, how it works, who is involved and why this is of interest, as well as some concerns it raises.
A Few Key Takeaways
- Libra is a new kind of beast. It is not structured either technically or governance-wise like other cryptocurrencies.
- Market trust will make or break Libra’s success, however the distributed governance structure with large trusted brands lends Libra considerably more credibility than Facebook could on its own.
- The initial profits for Libra’s founding members will not come from network transaction fees, but rather from returns on the underlying financial assets held in reserve to back each Libra coin.
Read the full details of our analysis here.