Facebook is unveiling an ambitious plan to develop a fresh digital currency and economic system that will transform the movement of cash around the globe, not just on its own applications.
Creating an open-source digital currency called Libra, set to launch in the first half of next year, is leading a consortium. The objective is for designers to develop facilities that make it easy and free for customers to send cash around the world — with the same comfort as sending a picture or message.
The Libra currency will not be run by Facebook as described in this white paper, but rather by a non-profit organization backed by a range of businesses and organizations. But with a fresh subsidiary, Calibra, which is building a digital wallet of the same name to store and exchange the currency, Facebook has a strategy to profit from it.
Your digital wallet’s economic data will not be used to target ads on Facebook platforms as the two divisions will be kept completely separate, the firm said.
“We saw the internet changing the game for everything that could be digitized except for cash,” David Marcus, Facebook’s Calibra division leader, said.
“Really, the figures talk for themselves. There are 1.7 billion unbanked individuals worldwide, the same amount is underserved by financial services, “said Marcus, who ran his Messenger division prior to taking over Facebook’s blockchain projects and was earlier PayPal chairman.
Now, with a basic data plan, anyone with a cheap smartphone has free access to all the information they want in the world. Why is cash not working the same way?
The announcement comes after Facebook faces a whole host of privacy issues, raising actual questions as to whether individuals will trust their economic data to the social platform. That’s why Marcus says it’s so important that Facebook isn’t in currency control.
It may sound super controversial but there’s no better way to demonstrate how our thinking evolves, what we know we should control and what we shouldn’t control and can’t control.Said Marcus
A network that allows billions of individuals around the globe to move cash should not be something that we can or should regulate, according to CNBC.
What Libra actually is:
In the first half of 2020, the fresh digital currency will be launched. It will be run by a non-profit, Geneva, Switzerland-based Libra Association. Its aim is to be widespread, stable and safe.
Unlike bitcoin and other cryptocurrencies, which can be extremely volatile and speculative, Libra is supported by comparatively stable cash supported by the government.
According to Marcus, if you’re buying $50 from Libra, your $50 is going to the Libra Reserve, It is intended to be stable and confers on Libra values that make it more like a traditional currency than any of the digital currencies are now. That’s how paper money was created. The fact that the Libra blockchain is open-source implies that anyone can create a currency-using service or app. The wallets that are created to use the service will be interoperable, so you can send cash to any other scheme that accepts Libra from Facebook’s Calibra wallet.
Consumers will not communicate with the Libra Association, but only through a digital wallet or operator will communicate with Libra. For individuals who are unable to digitally buy Libra with a credit card or digitally connected account, Marcus says he expects businesses in developing economies to develop places where individuals can exchange Libra for money.
Facebook is joined by 27 other founding members businesses and organizations. The objective for next year’s launch is to have at least 100 businesses and organizations on board. One of the “nodes” or areas where transactions involving Libra are validated will be managed by each member of the association.
Partners include payment space businesses: Visa, Stripe, and PayPal, which can assist merchants to recognize Libra. Also on board are some tech firms, including eBay, Lyft, Uber, Spotify, and Mercado Pago Latin American payment platform, which could drive currency acceptance adoption. Also engaged are two European telecom businesses, Iliad and Vodafone.