Facebook has just announced Libra, a cryptocurrency that users will be able to spend through Messenger and WhatsApp, and a new Facebook app called Calibra. Here’s what we know about Facebook Libra so far.
The easiest way to think of Facebook Libra is as a Bitcoin alternative. However, it’s not quite that straightforward.
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Facebook says the value of Libra will be much more stable than the value of Bitcoin and other major cryptocurrencies, as Libra “will be effectively linked to a basket of fiat currencies”, which Facebook describes as “a collection of low-volatility assets, including bank deposits and government securities in currencies from stable and reputable central banks”.
So there will be fluctuations in value, but they shouldn’t be anywhere near as dramatic as the ones we’ve grown used to seeing with Bitcoin, which has been known to appreciate or depreciate in value by thousands of dollars in a matter of hours.
Libra is built on the Libra Blockchain, and governed by the independent Libra Association that is headquartered in Geneva, Switzerland, Facebook says.
Libra Association members currently include: Facebook, Calibra, Mastercard, PayPal, PayU, Stripe, Visa, Booking Holdings, eBay, Farfetch, Lyft, MercadoPago, Spotify, Uber, Iliad, Vodafone, Anchorage, Bison Trails, Coinbase, Xapo Holdings Limited, Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures, Creative Destruction Lab, Kiva, Mercy Corps, and Women’s World Banking.
Calibra is a digital wallet for Libra, which is scheduled to launch alongside Libra in the first half of 2020. Facebook says Calibra will be accessible inside Messenger and WhatsApp, but also available as a standalone app. Facebook wants Libra to be used by people all over the world.
To get started, you’ll be able to convert your local currency into Libra. You’ll also be able to convert Libra back into your local currency when you want to withdraw.
“Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost,” Facebook wrote in a blog post. That’s right, there will be transaction fees.
“And, 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 and privacy aren’t the best of bedfellows, but the social media firm is attempting to calm potential fears by saying Calibra, a subsidiary of Facebook, won’t share account information or financial data with Facebook or any third party without customer consent, and that Calibra users’ account information and financial data will not be used to improve ad targeting.
However, Facebook adds: “Calibra will use Facebook data to comply with the law, secure customers’ accounts, mitigate risk and prevent criminal activity”.