Back in the day, the Winklevoss twins asked their nerdy Harvard classmate, Mark Zuckerberg, to write some code for a project they were working on. Zuckerberg ran with the idea, cut out the Winklevoss brothers, created Facebook and became one of the youngest self-made billionaires. The twins extricated a financial settlement and parlayed it into business ventures, including a bitcoin exchange, Gemini Trust, which made them billionaires too—albeit, not at the level of their former classmate and nemesis.
On Tuesday, Facebook announced that it will have a cryptocurrency of its own called Libra. Hmm, sounds eerily similar to Gemini. In an attempt to show that Zuckerberg and Facebook will not completely control the currency, initial plans have been drafted for it to be run by a consortium of 100 elite corporate investors and non-profit members, each investing a minimum of $10 million, including Mastercard, Visa, PayPal, Stripe, Uber, Spotify, eBay, Uber Technologies, Vodafone Group Plc, venture capital firms Andreessen Horowitz and Thrive Capital.
Facebook plans to also offer a subsidiary that will feature a digital wallet to store, buy, sell and exchange the cryptocurrency. Libra will be backed by real-world assets, held by a network of custodians and trade on a network of exchanges. Here’s the sweet spot for Facebook: individuals and merchants will be able to buy and sell products across all of the company’s proprietary apps, such as WhatsApp and Instagram. Facebook could further dominate and compete against the likes of Amazon by having its members transact business on Facebook and its other properties using its Libra currency.