If you have been in the digital assets industry for a while, you probably have heard of Libra. But isn’t it kinda tricky when you need to explain this stuff to your family? So let’s see how to explain Libra to your grandma. Next Christmas, you could be receiving Libra as a gift from nana!
Think about it nana, you want to order a BBQ sauce from Mexico. That BQQ place right next to the childhood home that you have been missing for years. You have to go to the bank, send the money, wait for a week for the money to get there. By the time that BBQ sauce gets here, you might not even want it anymore. Not to mention that the fee you need to pay could be more expensive than the sauce itself.
What if you can just grab your phone, and instead of sending me memes, you can send money to your BBQ sauce place as easy and the store gets it immediately! Plus, it’s free! No password to remember, no confusing registration, no long wait. Your BBQ place can pack and ship right away! Isn’t it nice?
This is what Libra is. Facebook started this, wanting transferring money and making payments to be easy and cheap for everyone. It will be the first digital currency that has so many use cases in the real world.
No need to be worried about losing money. Libra is not an investment. It works just like a traditional way to send money but better. You can transfer money to your nephew that is studying abroad to help out anytime! No more dressing up to go to the bank.
*If you grandma is not confused by this point, keep going*
Libra is a Stablecoin which means it has a pretty stable value, not like other digital assets like Bitcoin. It uses many big fiat currencies to maintain a reserve as collateral for the token. This is for payment and financial transactions, not for investment.
Facebook also has Calibra to be a Libra wallet. This is a separate company from Libra.
So basically, Facebook started Libra and then form a non-profit association (that has 21 members as of Jan 2020). Each member has 1 vote so Facebook doesn’t own this. Calibra is a Libra wallet by Facebook. If in the future there are more wallet options for Libra, you don’t need to use Calibra at all.
It’s been a while since Libra has launched. Of course, there have been both positive and negative feedback on this.
Big exciting news with many famous partners has been followed by the government’s and public’s concern that the many companies ended up leaving including Mastercard, Visa, eBay, Stripe, Mercado Pago, Paypal, and Booking Holding the parent company of Booking.com, Priceline, and Kayak.com. Vodafone was the last one to leave in January this year.
Moreover, the G7 report showed concern on the Stablecoins (digital assets designed to minimize the volatility of the price), which Libra is one of them. They believe that since Libra will increase the risk against the economy and financial sector, even though it might be able to meet all the regulations, they could not ever get a green light.
It’s not like Facebook is giving up. They know that Libra will never be the main payment token in developed countries like the US or Europe but it creates a difference in the cross-border payment and small financial transactions.
Zipmex believes that regulation and oversight by the government are crucial for the development of the industry. We welcome such prudent and savvy regimes and note that we are currently licensed and regulated by BAPPEBTI and the Thai SEC.
Libra and stablecoins’s journey is not easy as expected for a lot of people for sure. We might see the market correction just like we did in the big brother in the digital assets, Bitcoin.