Has PayPal Launched a Version of Facebook’s Libra?

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Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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Back in 2019, before Covid and all, there once was a global website called Facebook that decided one day: hey, let’s take over the world of money, and then the world of money responded: let’s not. In a nutshell, that’s the story of Libra. Okay, okay, it’s a bit more complicated than this, but you get the picture. The story is now being told in detail in David Gerard’s new book called: Libra Shrugged—How Facebook Tried to Take Over the Money.

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John Galt

Mr Gerard’s new book is of course a play on words on the famous novel Atlas Shrugged by Ayn Rand. For readers of this behemoth work, I do not believe Mark Zuckerberg is John Galt of course, although you could say he did move the world in some way.

In any case, the book tells how Libra 1.0 was blocked by the global financial system who saw it as a threat to their existence and how Zuckerberg and his board decided to revamp the project this year and launch Libra 2.0, in direct competition with the world’s central banks, who are not too keen on letting a social media platform with 2 billion users launch it’s very own stablecoin.

The author does reveal one interesting fact though. He states in an excerpt that:

If you’re buying something where the price isn’t listed in Libras, what you pay will go up and down from day to day—welcome to the currency markets! Get used to doing quick calculations whenever you want to buy something. Or just ignore the Libras, and use your local currency in the Libra system—like you would in PayPal.

Nasty secret

Well, that’s indeed highly interesting that Mr Gerard compares shopping with Libra on Facebook like doing a similar service on PayPal. For loyal readers of this site are all too aware that when PayPal announced a month or so ago that they would enter the world of crypto, other firms warned that PayPal entry came with a nasty secret.

Satoshi Labs, the company that runs hardware wallet Trezor, said at that time:

Users will not have the key to their own coins, while on the other they intend to “provide account holders with educational content to help them understand the cryptocurrency ecosystem”. The idea that anyone informed about bitcoin would agree to not holding their private keys might indicate that this educational content will overlook the fundamental rule:  Not your keys; not your coins.

Looks like the Paypal Mafia went ahead and did what the financial world feared Facebook would do all along. Although they didn’t create their own cryptocoin, PayPal does operate within its own ecosystem and thus is creating a financial ecosphere of its own.

Limited release of Facebook Libra in January

The FT reported yesterday that Facebook is going to launch the Facebook Libra crypto in January 2020. It’s not yet confirmed by Facebook, but the article reported about three persons who are involved in the development of the token. The original plan of Facebook had a lot of resistance from governments and authorities. The source of the article told the FT that Facebook is planning a limited release of the original plan. The Libra crypto will be backed to the US dollar, and other fiat currencies might follow.