This cryptocurrency news today came as a shocking one to many digital asset investors in the crypto space. According to a recent announcement by Facebook, the firm will be launching two digital currencies, not one. According to the announcement, the second digital currency that will come alongside Facebook’s Libra Coin is “Libra Investment Token.” Libra Coin is a digital currency that will be available to the general public. According to Facebook, unlike Libra, the Libra investment token is a security. This means that the investment token will be sold to a much more exclusive audience – accredited investors and the Libra Association (the corporate members of the governing consortium of the project).
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According to Facebook, Libra Coin will be pegged with a series of fiat currencies and government securities. All the interest generated on the collateral will be channelled to the investment token holders. A previous revealed that all the twenty-eight firms that Facebook recruited as node validators as founding members invested a minimum of $10M for the opportunity. The financial reward that they received is the investment token.
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The financial reward Facebook gave to its investors is totally dependent on the success of the project. In a document that supplements the Libra whitepaper, Facebook said:
“Because the assets in the reserve are low risk and low yield, early investors’ returns will only materialize if the network takes off and achieve success and the reserves grow substantially in size.”
In addition, token holders will get proportionate clout in the governance of Libra. Those that invest in the token do not have to run a node. If they do, then they will not be able to vote as members. The Libra Association will have different layers of governance. The council will be the most powerful layer, and it will comprise of a representative from each organization. To become a member, investors need to invest a minimum of $10 million. Furthermore, the firm must meet a minimum of one of the elite criteria, such as making it to lists such as Fortune 500. The financial reward investors get is proportional to the invested amount. However, a member gets one vote for every investment of $10 million.
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Some digital asset investors and analysts believe that the launch of Facebook’s Libra coin will result in the downfall of many digital currencies in the market including Bitcoin (BTC) and XRP (XRP). However, there are some that believe that the new digital currencies will not have a negative impact on the digital currency market. According to a top digital currency analyst, the launch of Facebook’s Libra Coin will bridge the gap between XRP, Bitcoin, and other top digital currencies. He believes Libra Coin will pave the way for the increased adoption of XRP (XRP), Bitcoin (BTC), and other digital currencies in the market.
The analyst pointed out that Ripple’s XRP solves a unique problem in the digital currencies industry. This means XRP and Facebook’s GlobalCoin do not solve the same problem, which means the launch of Libra Coin will not disrupt the existence and relevance of XRP and other coins in the market.