Facebook Reveals Launch Plans For Libra, Its Crypto Answer To Bitcoin

Project Libra a new cryptocurrency launched by Facebook looks to mainstream digital currency through apps like Whats App and Messenger

Project Libra a new cryptocurrency launched by Facebook looks to mainstream digital currency through apps like Whats App and Messenger

Once the coin is operational - sometime in 2020, if Facebook's being straight with us - the social network's 2.7B users will theoretically be able to use the coin to pay for anything from an Uber ride to a cup of joe.

Facebook's Calibra will work with the Libra Association to put strong security measures in place to keep users' money and personal information protected. Eventually, the ad biz-turned-bank wants to make products and services available without the need to carry cash, a monetary instrument that allows even more privacy - anonymous transactions - than the Libra ecosystem will offer. But the company insists that all transactions will be deeply encrypted, and "if people use Calibra or similar wallets, their individual transactions won't be visible on the Libra blockchain", per the AP.

Unlike the decentralized bitcoin, the new cryptocurrency announced Tuesday by Facebook will be governed by a select group of people based in Switzerland. In addition to Facebook and Calibra, there are a number of payment processors in the Libra Association, including MasterCard, Visa, and PayPal. Governance decisions will be made by a vote of Libra Association members, with Facebook's vote carrying the same weight as other Libra Association members.

Is it a cryptocurrency?

Facebook said it chose Switzerland because the country "has a history of global neutrality and openness to blockchain technology, and the association strives to be a neutral, worldwide institution, hence the choice to be registered there". That cryptocurrency is called Libra, and it'll launch next year alongside a digital wallet called Calibra.

Cryptocurrencies like Bitcoin allow users to buy and sell digital units of currency independent of a central bank, with little to no transaction costs.

SAN FRANCISCO: Facebook unveiled plans Tuesday for a new global cryptocurrency called Libra, pledging to deliver a stable virtual money that lives on smartphones and could bring over a billion "unbanked" people into the financial system.

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Is Facebook entirely in charge of Libra?

Indeed, a similar crypto-based payment service, called Circle and based in Boston, has been offering free global money transfers since 2017.

Such a scenario isn't hard to imagine, with Libra's announcement not even being in circulation 24 hours yet, when a top democrat in Congress, House Financial Services Committee Chairwoman Maxine Waters (D-CA), demanded that Facebook halt the development of Libra.

Given the on-going privacy concerns surrounding Facebook, having other companies backing the project may help alleviate users' and regulators' distrust in the currency, something David Marcus, co-creator of Libra, noted when making the announcement.

Facebook said Libra would be independently-managed and backed by real assets, and that paying with it would be as easy as texting.

Since then, thousands of bitcoin alternatives have launched, and Facebook is just one of dozens of blue-chip companies dabbling with the underlying technology.

"Many people who use Facebook are in countries where there are barriers to banking or credit".

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