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

Daniel Fowler
June 20, 2019

"Libra is a global, digitally native, reserve-backed cryptocurrency built on the foundation of blockchain technology", the company wrote on a new website dedicated to the rollout. Libra will be controlled by a nonprofit group in which Facebook will share responsibilities with companies ranging from Mastercard and PayPal to Uber and eBay.

Facebook has said that it expects to be fined as much as $5 billion by the Federal Trade Commission after an investigation stemming from the scandal.

Creating its own globe-spanning currency - one that could conceivably threaten banks, national currencies and the privacy of users - isn't likely to dampen regulators' interest in the social media giant.

Facebook on Tuesday announced the Bitcoin rival it has been developing for the better part of a year: Libra.

Libra won't launch as a digital currency until 2020. If it doesn't, there are two main scenarios at play: Libra brings negative attention and heavy-handed regulation to the space that harms Bitcoin; or Bitcoin continues to unexpectedly outshine Libra, demonstrating the benefits of a borderless, decentralized cryptocurrency to the entire world on a grand scale like never before.

"In time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass", Facebook said in a blog post Tuesday.

Many analysts believe Zuckerberg wants to create a United States version of the Chinese service WeChat, which combines social networking, messaging and payments in a single app. Libra would take Facebook a step closer to that end. User information might also be shared in some other "limited cases", such as when law enforcement requests information, Facebook said in a statement.

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It's been the buzz of Crypto Twitter and tech blogs for months, but today we have details of Facebook's next step toward world domination - and the next move that's most definitely going to raise eyebrows among regulators in Washington. Facebook says it is creating a new subsidiary called Calibra to oversee its payment initiatives. Founding backers also include venture capital firms like Andreessen Horowitz and Union Square Ventures and non-profit organizations like Kiva and Mercy Corps.

The company said Libra will be a reserve-backed digital currency, or stablecoin, which is pegged to a basket of government-issued currencies to minimise volatility.

"Using this wallet, people will be able to send, spend and save Libra".

Calibra won't require users to have a Facebook account to make a free wallet. They also aim to keep its value stable, and each founder will maintain a server that will be a node in the Libra blockchain network that will validate transactions.

Facebook's goal is to provide users with a way to send money to other social network citizens via smartphone "at little or no cost". And for now Calibra's just building a wallet to handle those transactions.

Libra, set to be launched next year, will let people make payments via Facebook's apps and WhatsApp.

Facebook's whitepaper claims that it will not source transaction data from the Libra Blockchain without consumer consent.

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