Published: Wed, June 19, 2019
Finance | By Kristine Clayton

Facebook launches cryptocurrency with Visa, MasterCard, Uber, and others

Facebook launches cryptocurrency with Visa, MasterCard, Uber, and others

It's very early days for Calibra / Libra, but as the sole music service involved from day one, Spotify will have a close-up view of how the project develops, and how the resulting technology could be used in its business.

"Libra could spark additional cryptocurrency volume due to increased accessibility from both institutional players and everyday retail users".

Company officials emphasized Libra as a way of sending money across borders without incurring significant fees, such as those charged by Western Union and other global money-transfer services. This influence will manifest after the 12 to 18 months that Facebook will take to integrate the asset into its services.

The social networking giant has linked with 28 partners including Mastercard, PayPal and Uber to form Libra Association, a Geneva-based entity governing the new digital coin, according to marketing materials and interviews with executives.

However, consumer privacy concerns and regulatory barriers could stand in the way of Facebook's crypto endeavour. Facebook says it has the lofty goal of bringing financial services to the 1.7 billion around the world who still don't have bank accounts. And backing all this is The Libra Association, which Facebook says will be an independent, not-for-profit organisation.

The antisocial network's blockchain-tracked currency, Libra, will reside in a digital wallet named for the company's newly formed financial services subsidiary Calibra.

Real-world currency used to buy Libra will go into a reserve backing the digital money, the value of which will mirror stable currencies such as the United States dollar and the euro, according to its creators. "We think most advertisers will wait and see what the potential impact will be on their businesses before allocating more ad dollars to FB". They are technically separate from Facebook proper, but that distinction will probably only be noticed by financial regulators.

Calibra won't require users to have a Facebook account to make a free wallet. In addition to its own app, the wallet will be folded into Facebook mobile products, including WhatsApp and Messenger.

Many privacy questions remain unanswered, though. 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. That could make the Libra blockchain a permanent record of all purchases or cash transfers every individual makes, even if they're stored under pseudonyms rather than real names.

Security measures aside, the move comes at a delicate time for Facebook, which is in the cross-hairs of regulators in the US and Europe over its allegedly anti-competitive behavior, its use of data and the policing of its platform.

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