This morning, Facebook confirmed some long-running rumors by announcing that it’s about to dive into the world of cryptocurrency. That cryptocurrency is called Libra, and it’ll launch next year alongside a digital wallet called Calibra. Calibra will be a subsidiary of Facebook, while Libra will be governed by the Libra Association, an organization comprised of a number of different companies (including Facebook and Calibra) that’s headquartered in Geneva, Switzerland.
Libra is described as “a global, digitally native, reserve-backed cryptocurrency built on the foundation of blockchain technology.” The Libra Association says that it’s “fully backed by a reserve of real assets,” but doesn’t clarify what those assets are. The goal, it seems, is to bolster trust in Libra’s value while at the same time keeping that value stable by tying it to these nondescript assets and currencies.
Calibra is more than just Facebook
The Libra Association already has some big names on board as members. In addition to Facebook and Calibra, there are a number of payment processors in the Libra Association, including MasterCard, Visa, and PayPal. Lyft, Uber, Spotify, and eBay are among the marketplaces that have joined up, with a number of blockchain (Coinbase, Anchorage) and venture capital firms (Andreessen Horowitz, Breakthrough Initiatves) in the Association as well.
One of the stated goals of Libra and Calibra is to make basic financial services more accessible to people around the world. Calibra will be integrated in Messenger and WhatsApp along with launching as a standalone app, and Facebook envisions a future where you’ll be able to spend, send, and save Libra as easily as you would send a message to someone.
“From the beginning, 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 said today. “And, in time, we hope to offer additional services for people and business, 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 metro passes.”
Is Facebook cryptocurrency trustworthy?
Of course, Facebook’s recent privacy blunders could very well leave many folks hesitant to use Calibra and Libra. Facebook did its best to allay those concerns today, saying that Calibra will have “all the same verification and anti-fraud processes that banks and credit cards use,” including automated systems meant to detect and stop fraud. Calibra will also have 24/7/365 live support through Messenger and WhatsApp, so presumably, someone will always be available to help if there’s a problem.
Calibra also won’t share account or financial information for Facebook, aside from limited cases. Data will be shared for the purposes of complying with the law or providing basic functionality within Calibra, but that data won’t be used for ad targeting on Facebook proper.
Whether or not those promises mean anything after Facebook’s numerous privacy scandals is ultimately up to each individual, but Facebook is trying to make it clear that it’s taking privacy seriously with the roll out of Calibra and Libra. You can read more about Calibra at the company’s website, or check out the Libra white paper for more on this incoming cryptocurrency; both are slated to launch sometime in 2020.