The dream of Facebook, Inc. (NASDAQ:FB) to create a cryptocurrency based single currency – Libra for the entire world is now doomed. After facing criticism for almost one year, Facebook has now changed its plans. The social media giant planned to eliminate cross border restrictions and associated fees in cross border transactions.
Facebook planned to provide an easy to use the global currency for over 1.7 billion people, who lack access to proper banking and safeguard the hard-earned income by eliminating ATM charges, wire costs to overdraft, and fee from remittances. It has succumbed to the pressure of the governments of several nations that do not want to lose control of their currency. Libra is now just like PayPal.
Nations like South Africa, Turkey, Argentina, and Venezuela, whose inflation rates are very high could have abandoned the local currency. Libra is governed by private companies and those nations need not care about monetary policies.
Global watchdog regulates Libra
The global watchdog will regulate Libra. It is no longer a single global currency. Libra will build a payment network, which will be linked to local currencies. Therefore, the frictions in transferring the funds across the world will remain.
Libra is linked to USD, GBP, or Euro
The Libra association will now issue a multi-currency Libra coin. Libra will now be linked to a variety of currencies like the British Pounds, Euros, and US Dollars. The send transaction that involves one Libra will be backed by a fraction of GBP, Euro or the USD. It will act as a hedge against fluctuations in currency. However, the risks for the sellers and buyers will remain. Unregulated entities are limited by the Libra association. They need to follow the licensing process or registration in a FATF (Financial Action Task Force) member authority.
Facebook introduces new care emoji reactions
Facebook has introduced new care emoji reactions in its messenger and on the main app. It is useful for people staying indoors to share their feelings and reactions to neighbors, friends, and family. The care emojis in the form of a pulsing heart and hugging heart will appear beginning next week. Therefore, you can show extra love or care to your friends and family.