Shannon Roddel | June 23, 2019
Facebook announced Tuesday (June 18) it will launch a global cryptocurrency called Libra in 2020, alongside the underlying blockchain-based network — a secure, transparent and decentralized digital lender — that will support it.
Though it will rival Bitcoin, Libra is designed to serve as a mainstream form of digital money, as stable as the dollar and backed by a reserve of assets, which will allow it to support a range of financial products including loans and credit. Mike Chapple, associate teaching professor of information technology, analytics and operations at the University of Notre Dame’s Mendoza College of Business, says the Libra project promises to address many of the fundamental barriers that have stopped the widespread adoption of Bitcoin and other cryptocurrencies.
“First and foremost,” says Chapple, a cybersecurity and privacy expert, “Libra is designed to hold a stable value. Bitcoin and its competitors have market-driven valuations, meaning that the price of a Bitcoin is determined solely by market demand for Bitcoin. This creates a market fueled by speculation and subject to enormous volatility. Libra, on the other hand, is backed by a financial reserve that mixes the world’s major stable currencies. For every Libra coin in existence, there is an equivalent amount of cash sitting in the bank or short-term government securities. This stability promises to make Libra a stable currency for consumers rather than an attractive gamble for investors.”
Unlike Bitcoin, Chapple says, Libra will be user-friendly.
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