Just two months ago, with a great deal of hype and fanfare, Facebook’s Mark Zuckerberg unveiled his company’s latest project: the Libra Association, a blockchain cryptocurrency initiative backed by a variety of well-heeled corporations – including Facebook (FB), private venture capital firms, and major players in payment processing, such as Mastercard (MA), Visa (V), and PayPal (PYPL) – and linked to a basket of traditional fiat currencies as a hedge against the extreme volatility of the “pure” cryptocurrencies such as Bitcoin. Facebook being involved, the controversy did not take long to erupt.
The main concerns, at first, centered around user privacy issues. Facebook has a notoriously poor reputation in this area, and went to great lengths to address possible concerns. The new Libra crypto coin will be administered by the Libra Association, not by Facebook directly. The Association is grouping of Libra’s backers, each of which gets an equal voice in overseeing the currency. The Libra Association members each put the same $10 million investment into the common pot backing the currency, so no one member can claim a larger share than the others. On paper, it’s appears to be a good system.