The day has finally come for Facebook to show its cards. In a June 18 announcement, the social media behemoth announced the planned launch of their global cryptocurrency for next year, named Libra.
The cryptocurrency will allow users to buy items online or send money to others with nearly no fees. They also plan to allow users to cash out their Libra funds through local, physical tie-ups like grocery stores.
A visit to their Libra website, its immediately apparent that Facebook has planned for this digital currency to be a solution or the unbanked in the world, as they quickly point out that 1.7 billion people in the world are unbanked, and exclaim “Libra is for everyone.”
They have a whitepaper available to read, which describes the blockchain it will be built on, the payment partners they’ve already signed on (which include Mastercard, PayPal, PayU, Stripe and Visa), marketplaces (eBay, Spotify, Uber included) who will accept the currency, a description of the cryptocurrency itself, and a definition of the Libra association, the group that will govern the crypto.
That Libra Association already has 27 members, including Facebook itself, but also 26 other major businesses, some of which are already named above. They promise that beyond governing the crypto, the members will contribute to the asset pool that will back the currency, making it a more intrinsic crypto than many of the dark coins and so called stable coins available in exchange markets.
On the Facebook site itself, they also announced the Calibra wallet, which will launch for Facebook Messenger, WhatsApp and as a standalone app in 2020.
In a departure from many digital currencies, Facebook is also quickly committing to being regulated. In their blog post, they note:
“We will also continue engaging with regulators, policymakers, and experts to solicit feedback and ensure that this global financial infrastructure is governed in a way that is reflective of the people it serves. We believe this will be a significant undertaking — and responsibility — and we will continue to work openly and collaboratively as we move toward our goal of launching this new ecosystem in the first half of 2020.”
They also expressly note that this is not an effort to upend the financial sector, but to work with it. Blockchain chief David Marcus told The Verge, “You’ll see banks on this between now and next year, because if we bring on another billion people, they’ll need savings accounts, loans, and things banks are very good at.”
It’s an impressive way for Facebook to wade into the crypto space, no doubt. There’s still lots for them to prove though if they hope to unseat the original vision of Bitcoin, now championed by Bitcoin SV (BSV). Specifically, can they be offering anything that rivals the decentralization of Bitcoin if the power is held in the hands of multi-billion companies? And will this currency offer the kind of trust-less, peer to peer money that Bitcoin is when you have Facebook at the center of every trade?
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.