Facebook's new cryptocurrency Libra will hit the market in 2020

Daniel Fowler
June 19, 2019

Facebook plans to launch a cryptocurrency called Libra next year as part of its wider efforts to expand beyond social networking and into e-commerce and global payments.

Facebook is making its foray into cryptocurrencies with the formation of Libra Association, a consortium of 28 companies led by the social media giant that will manage a new currency.

Libra won't launch as a digital currency until 2020.

Bitcoin, the best-known digital coin, was created in 2008 as an alternative to traditional currencies that are controlled by governments and central banks. Members of the Libra Association, which governs the project, will operate so-called nodes that will support the Libra network; and if more than 1/3 of the nodes band together, they could potentially start falsifying transactions.

"Libra" - described as "a new global currency" - was unveiled Tuesday in a new initiative in payments for the world's biggest social network with the potential to bring crypto-money out of the shadows and into the mainstream. Facebook said Calibra "may integrate with cryptocurrency exchanges", but will not act as an exchange. Most importantly, Calibra will allow users to send Libra to nearly anyone with a smartphone just like sending a text message.

Calibra, a newly formed Facebook subsidiary, says its goal is to provide financial services to billions of people around the world who lack access to banking, a large portion of whom are women in developing countries.

Facebook's rumored cryptocurrency platform has finally been officially announced. Such consolidation of power in the hands of a company that already has a monopoly on online social interaction for its 2-billion-plus users - and a bad record of protecting users' privacy - has understandably anxious the skeptics.

Facebook's Libra cryptocurrency will launch in the first half of 2020
The social network will launch the cryptocurrency in 2020, complete with a wallet developed by Facebook's new Calibra subsidiary. Libra is a stablecoin created to tame the volatility of cryptocurrencies and thus be useful for day-to-day commerce.

Calibra won't require users to have a Facebook account to use Libra. The currency will allow users to send money to each other and make payments from their smartphones.

Libra will be different, Facebook says, in part because its value will be pegged to a basket of established currencies, such as the United States dollar, the euro, the yen and others.

Alex Norstrom, chief premium business officer of Spotify, said the new currency will remove barriers in financially underserved markets. "As with many technological innovations, Libra offers us a trade-off between privacy and convenience".

Cryptocurrencies are largely unregulated and investors have lost hundreds of millions through hacks, while the market faces money-laundering and terrorist financing allegations.

Switzerland's financial watchdog said it was in contact with the initiators of the Libra project but declined to comment on whether it was obtaining specific regulatory permission or status. "This means Calibra customers' account information and financial data will not be used to improve ad targeting on the Facebook family of products". The most interesting thing? Even the Federal Trade Commission, which is believed to be close to leveling a historic $5 billion fine against the company, would be entering relatively uncharted territory attempting to regulate a Facebook crypto.

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

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