Facebook has today unveiled plans to launch its new cryptocurrency, Libra, and a blockchain-powered digital wallet, Calibra. This marks the social media giant’s expansion into the global payments sector.
Scheduled to launch in the first half of 2020, the digital currency will allow people send money to anyone from their smartphone.
According to a white paper on Libra that was released, the new decentralised blockchain’s mission is to “create a simple global financial infrastructure that empowers billions of people around the world. It’s powered by blockchain technology and the plan is to launch it in 2020.”
Facebook believes blockchains offer certain advantages, particularly in “accessibility and trustworthiness.” So Libra will serve as a stand in for the unbanked population of adults in the world.
Unlike bitcoin and other crypto, Libra is created to dodge the fluctuating nature of other cryptocurrencies with a reserve of real assets. This will make it a simpler payment method with more efficiency and allow for sending money across borders without incurring significant fees, such as those charged by international money-transfer services.
Libra is also expected to eventually support an entire range of financial products — including banking to loans/credit.
Facebook has linked with 28 partners to form the Libra Association, a governing body for the new digital coin. They include companies operating in finance, telecommunications, technology service providers, VC firms, nonprofit organizations, and crypto firms such as Coinbase, Mastercard, Visa, PayPal, Stripe, Spotify, Uber, eBay and Vodafone.
Facebook hopes to have 100 members of the Libra Association by launch time next year. And each member must invest at least $10 million to join.
With this network of partners, Facebook says it will have no special role in governing the cryptocurrency as it will be managed equally by association. This could positively influence its appeal to users considering that Facebook has had a poor privacy track record of late.
These organizations will also contribute to what is known as the Libra Reserve – an asset pool that will ensure every unit of Libra currency is backed by something of intrinsic value rather than scarcity, like other cryptos. This, Facebook believes, will help to maintain the cryptocurrency’s stability, so it’s not a gamble.
In addition to Libra, Facebook is also launching a digital wallet called Calibra which will be accessible as a standalone app and will be integrated into Messenger and Whatsapp.
“Calibra will be regulated like other payment service providers. Any information you share with Calibra will be kept separate from information you share on Facebook. From the beginning, Calibra will let you send Libra to almost anyone with a smartphone at low to no cost.”Facebook
Calibra will be available for both Android and iOS, and Facebook hopes to make it offer services such as bill payments and purchases using Libra.