Facebook to launch new cryptocurrency, called Libra

Ann Santiago
June 20, 2019

Facebook also could use its own currency to drive more people to make purchases from ads on its social media sites, said Gartner analyst Avivah Litan, who based her comments on press reports about Libra that preceded Facebook's formal announcement.

Facebook's whitepaper claims that it will not source transaction data from the Libra Blockchain without consumer consent. Ultimately, the company aims for its digital currency to replace regular money for a wide variety of use cases.

"The aspect of sovereignty must stay in the hands of states and not private companies which respond to private interests", Le Maire told Europe 1 radio.

Facebook plans to launch its digital currency platform, Libra, next year.

Facebook is already too big and too powerful, and it has used that power to exploit users' data without protecting their privacy.

"If you're living in the Congo, you're more likely to have a Facebook account than a bank account", said Alex Tapscott, cofounder of the Blockchain Research Institute in Toronto.

Libra learned from the many other cryptocurrencies that have preceded it such as bitcoin and is created to avoid the roller-coaster valuations that have attracted speculation and caused ruin. And it will allow people to send Libra back and forth on two of Facebook's core messaging apps - WhatsApp and Messenger. The goal, it seems, is to bolster trust in Libra's value while at the same time keeping that value stable by tying it to these nondescript assets and currencies. It will also be backed by a reserve fund, whereas bitcoin is not. The association will act as a monetary authority for the digital currency.

At the same time, Massachusetts Democratic US Senator Elizabeth Warren has made an antitrust breakup of Facebook a key plank of her campaign for the presidency. He said that even though there is a promise for new technology in fostering financial inclusion and faster payments, particularly in the developing world, that they are aware of many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework.

But the company should wait until the US Congress has examined the project, according to the chairwoman of the House Financial Services Committee.

They would not specify which regulators or whether Facebook had applied for financial licences anywhere.

Facebook says Calibra will share data for law enforcement, security, risk mitigation and to prevent criminal activity.

Libra is the biggest, boldest move yet to move mainstream money in the direction of blockchain-based digital currency. The digital wallet will let users send and receive Libra for a low or no cost.

Facebook just announced its Bitcoin rival, but is it really safe and secure? Facebook says that Calibra also hopes to offer people more banking-style facilities like paying bills and contactless payments on public transport and in coffee shops.

"And that´s what is super exciting for the crypto industry, is somebody comes along who understands user experience and has billions of users that they can roll this out to".

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