Facebook has released the white paper for its long-awaited cryptocurrency and blockchain-based financial infrastructure project today, June 18.
As per the white paper, Facebook’s global stablecoin, named “libra,” will operate on the native and scalable Libra blockchain, and be backed by a reserve of assets ostensibly “designed to give it intrinsic value” and mitigate volatility fluctuations.
These assets consist of many bank deposits and short-term government securities that will be held in the Libra Reserve for every Libra that is issued.
The new cryptocurrency will be governed by a not-for-profit, Switzerland-based consortium — the “Libra Association” — which counts Mastercard, PayPal, Visa, Stripe, eBay, Coinbase, Andreessen Horowitz and Uber among its founding members.
Facebook plans to expand the association to around 100 members by the time of Libra’s launch in the first half of 2020. The white paper in part reads:
“While final decision-making authority rests with the association, Facebook is expected to maintain a leadership role through 2019. Facebook created Calibra, a regulated subsidiary, to ensure separation between social and financial data and to build and operate services on its behalf on top of the Libra network.”
The Libra Association is itself governed by the Libra Association Council. The council’s members initially are the founding members, each of which runs a validator node on the network and was notably required to make a minimum investment of $10 million to seal the position. According to Facebook, each $10 million investment secures an entity one vote on the council.
Facebook also released the Libra Investment Token — distinct from its global user-oriented cryptocurrency libra — which can be purchased or distributed as dividends to the association’s founding members and accredited investors.
As Libra is not technically pegged to any given national fiat currency, the white paper states that users will not always be able to redeem the token for a fixed amount of fiat, although Facebook claims that the reserve assets have been chosen so as to minimize volatility.