Last month, Facebook announced its cryptocurrency Libra and a global association of organizations that will govern it.
The move, which has been expected for a while, represents a big endorsement for cryptocurrency and the underlying technology of blockchain, which is a secure, transparent, and decentralized digital ledger. Blockchain provides a trusted accounting system to enable cryptocurrency transactions, and Facebook hopes to use it to empower billions of people to use a simple global currency.
Facebook’s Libra is another phase in the efforts to create global money.
How will Facebook's announcement affect Saga?
Saga is a global digital stable coin, founded by economists and technological experts and backed by MizMaa a year ago.
While Saga and Libra are extremely similar in many core aspects (KYC, regulation, monetary model, etc.), there are fundamental differences between them. Here is a quick view of the differentiators between the coins:
• Libra has not yet declared which basket of currencies it would be pegged to, and will only decide after the launch of the coin. The decision will be taken by the members of the Libra Association, nominated by Facebook.
• Saga, on the other hand, published its monetary model, validated by world-renowned experts, and subjects any change of the model thereof to the decision of its holders.
• Facebook also doesn’t clarify under which circumstances it will change the composition of the basket.
• Saga declared the IMF’s SDR as its selected basket of currencies and is not considering any changes to this basket as it is not in its hands to change. This means greater stability for its users.
• Libra’s model gives the Founding Members and the investment token holders full control over the currency.
• In Saga, the economy participants are the sovereign of the currency. The ultimate power sits with the participants, that can veto the most fundamental decisions and call for a new election for the council.
• Saga operates over public and permissionless blockchain. Saga has no control over which transactions are executed and participants don't have to trust Saga, thanks to the nature of the decentralised processing.
• Libra runs on its own private and permission-based blockchain which means that only Facebook and its commercial partners will have the ability to initiate and validate transactions. Users will have to trust they are doing so impartially.
In many senses, Libra acts as a major validator of Saga’s vision (and the global currency vision). The market is now much more open to discussion about cryptocurrencies, monetary models and governance frameworks.
The key differentiators between Saga and Libra pose a great opportunity for Saga to serve as an alternative to players who will prefer not to entrust their resources to Facebook’s centralised Libra.
Should Libra come to market and be widely adopted by consumers, it would widen the centralised and unchecked power of Facebook and increase its access to and employment of user data - extending it to their livelihoods and financial habits. Data Facebook would surely monetize.
Whereas Libra will become available during 2020 and is yet to face many more regulatory and product developments, Saga’s product is ready to launch, awaiting final approval from the Swiss and British authorities.