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# System prepended metadata

title: Libra Whitepaper

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# Libra Whitepaper

* making traditional finance systems programmable, interoperable, upgradeable

## Updated (April 2020) whitepaper has more on:
* single-currency stablecoins in addition to multi-currency coin
    * multicurrency LBR could interfere with monetary sovereignty and monetary policy
    * adding LibraUSD, LibraEUR, LibraGBP, and LibraSGD
    * LBR is a "digital composite of some of the single-currency stablecoins on Libra network." (defined in fixed nominal weights, e.g. SDR that's maintained by IMF)
    * LBR will be used as efficient cross-border settlement coin + neutral, low-volatility option for those that don't have stablecoin on network yet
    * method provides a method for the integration of central bank digital currencies
* more safety through compliance framework
    * want to ensure Anti-Money Laundering, and Combating the Financing of Terrorism, sanctions compliance, prevention of illicit activities
    * will establish a FIU (Financial Intelligence Function) to uphold standards
    * four different types of participants:
        * designated dealers
            * Regulated virtual asset service providers (VASPs)
        * registered/licensed as VASP in a Financial Action Task Force (FATF)
            * Certified VASPs
        * permitted to do VASP work through certification
            * Unhosted Wallets
        * Other individuals/entities
    * to begin with, network only available to Designated Dealers and Regulated VASPs
* removing permissionless-ness 
    * perimeter control
* protections for the Libra Reserve
* Reserve will hold assets with:
    * very short-term maturity,
    * low credit risk
    * high liquidity

## Introduction
* blockchains are good for:
    * distributed governance
    * open access
    * security through cryptography
* the bad thing about blockchains is that:
    * prices are volatile
    * they can't scale

Belief that the benefits of blockchain can come with compliance and regulatory frameworks.

## Libra Payment System
* Libra made up of three parts:
    * Blockchain as the distributed ledger, which acts as the backbone
    * Libra coins that are backed by Libra Reserve of assets that are cash or cash equivalents and short-term government securities
    * Governance by independent Libra Association and Libra networks
* Libra Association is headquartered in Geneva, Switzerland
    * Facebook has no special rights within the Association

## Libra Blockchain
* requirements:
    * scaling to billions of accounts
        * high transaction throughput
        * low latency
        * high-capacity storage
    * Highly secure
    * Flexible for future innovation
* design decisions:
    * uses the Move programming language
    * Uses BFT-tolerant consensus
    * Adoption of widely adopted blockchain data structures
* Move programming language
    * specifically designed to ensure that assets don't get cloned through "resource types" that constrain digital assets to same property as physical assets
    * currently, only Association-approved smart contracts can integrate directly into Libra
* BFT consensus
    * LibraBFT
        * will continue to function properly even if up to 1/3 of the network of validators are compromised
        * allows for high transaction throughput compared to PoW
        * facilitates transaction finality
    * security of BFT depends on quality of validators, so due diligence will be done by the Association
* Blockchain data structures
    * Merkle trees for data storage
    * provides public verifiability for anyone to audit accuracy