Facebook Launches the Libra Project

22 June 2019

Each week we share the latest news in blockchain and finance. This is newsletter #41 and covers Facebook’s Libra Project, Monerium getting approval from the Iceland Financial Supervisory Authority, TokenOS’ raise from BNP Paribas, and more.

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Facebook has officially launched the Libra project. The goal of the initiative is to offer “a stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association”, in order to “create more access to better, cheaper, and open financial services”.

As stated in its whitepaper, Libra consists of:

  • The public and initially permissioned Libra Blockchain,
  • A stablecoin called Libra, and
  • The Libra Investment Token, 

All governed by the Libra Association. The association’s members currently include e.g. Mastercard, PayPal, Stripe, Visa, eBay, Spotify, Lyft, Uber, Vodafone, Coinbase, Andreessen Horowitz, and Union Square Ventures. In other words, huge companies who’s tech we use every day.

So what does it all mean? Will we see massive blockchain adoption, or will users willingly give even more data to (the likes of) Facebook? Or how about both? We’re not too sure yet, but for more info and insights, take a look below at this week’s longer reads and postscript.

 

QUOTE

We need a currency for the internet. And the internet being an entity that isn’t controlled by any company or any one government, that is for the world and for the people of the world.

That is what I would want to help make happen. I would hope that all private companies can see the value of having a stateless currency that all people can access, and is not bounded or constrained by any one corporate entity.

Twitter and Square CEO Jack Dorsey a few days before the Libra announcement, in an interview with QZ

 

NEWS

👍 Consensys-backed crypto-e-money provider Monerium has received approval from the Financial Supervisory Authority of Iceland to issue electronic money using blockchain technology. It is the first time such approval has been granted in the EU.

💸 Having hosted equity rounds from several crypto exchanges, Investment platform BnkToTheFuture has acquired decentralized exchange Altcoin.io, with the goal to build a decentralized security token exchange.

⚖️ After raising $18.5m in 2017, open banking platform TokenOS has now raised an additional $16.5m from the venture arm of BNP Paribasamong others. The company has partnered with Mastercard and offers a stablecoin for instant payment execution.

💰 Ripple is investing up to $50m in shares of money transfer provider MoneyGram. As part of the deal, MoneyGram will use Ripple’s tech to handle cross-border fund transfers for at least 2 years.

🏦 HSBC launched the Digital Accounts Receivable Tool (DART), a blockchain-based tokenization solution for accounts receivables, “reducing manual work such as invoice payments documentation”.

🏢 The European Investment Bank, Euroclear, Santander & EY proposed a blockchain-based solution for the issuance and settlement of European Commercial Paper (what is ECP?). The solution should make the process more efficient and enable full transparency and traceability, and will soon go into a pilot phase

 

LONGER READS

♎ In line with the main topic of this newsletter, here are a few long reads on the Libra Project:

  1. The project’s whitepaper
  2. look at the project’s second token: The Libra Investment Token
  3. Four big questions facing Facebook’s Libra coin, by the Financial Times
  4. A good look at LibraBFT, the Libra byzantine fault tolerant consensus algorithm (a technical read)
  5. On Facebook’s subsidiary Calibra, the company tasked to build the first wallet and financial services on the Libra blockchain (and actually make money) 

 

NEW DEALS

🗝️ New Israeli-Spanish tokenization platform Stellerro is raising up to €5m in an STOoffering 12.5% of the company to investors.

 

POSTSCRIPT

So how did others respond to the Libra project?

Well, regulators seem to be more negative than positive. Bank of England governor Mark Carney says he has a “open mind, but not open door”; Federal Reserve Chairman Jerome Powell stated “there are benefits…but also risks we’re watching”; and France’s finance minister Bruno Le Maire stated Libra “can’t and…must not happen”, and that “it is out of question’’ for it to “become a sovereign currency”.

For now, these are just interesting statements. Even more interesting is how other companies will react. What about the AANG companies (Amazon, Apple, Netflix, Google) in FAANG? Have they declined, or have they not been invited at all to join the Libra Association? And what about major banks and financial institutions (think HSBC, BNP Paribas..), how will they respond to Facebook’s foray into their sector?

We think they’ll take the new competition head-on — or as we show in ournews section, some have already started doing so. In any case, we’ll let you know if we know more.

See you next week! 👋

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