Facebook Announces It's Entering The Cryptocurrency Market With Libra

19 June 2019
Culture, Facebook
Credit: Facebook
But would you be willing to trust your money with a company which, only a year ago, couldn’t secure your data?

Cryptocurrency. It’s a strange realm of the money-making market and something that seems to divide audiences into those who proclaim its benefits, and then the rest of us – those who have no clue what it even entails and refuse to spend time gaining such knowledge.

While many have been put off by the instability of the market, it seems things have been relatively stable in the world of cryptocurrency lately. Just recently, rumours were sparked that clothing behemoth Nike was looking to dive into the world of crypto after they filed a trademark to create a digital currency called “Cryptokicks.”

But Nike may not be the only global business to enter the realm, after it’s been reported that Facebook is aiming to release its GlobalCoin cryptocurrency in 2020 under its “Project Libra” scheme.

For much of 2018, the secretive project was kept under wraps, even as the social media giant registered a fintech firm dubbed Libra Networks LLC, in Geneva (Switzerland) – a platform that would offer services in emerging technologies, including digital payments.

Facebook introduced a WhatsApp payments feature to the Indian market back in February 2018, in what was perhaps the first phase of the long-term digital payment feature that FB wants to introduce across its entire ecosystem. As Medium reports, the “Creation of blockchain group within the company followed by a reversal of bans on Cryptocurrency ads soon after that defined the trajectory of things to come.”

Rumours were then strengthened in 2019 after Facebook acquired its first blockchain startup. The Wall Street Journal then reported that Facebook was seeking $1 billion in investment for its proposed stable coin. After Zuckerberg met Bank of England Governor Mark Carney last month to discuss the risks involved and opportunities such a project presents, the BBC stated that Facebook is now finalising plans to launch its cryptocurrency in about a dozen countries by Q1 2020.

Now, Facebook has officially unveiled its cryptocurrency to the world announcing the launch of what is indeed called Libra: a cryptocurrency developed in conjunction with a ton of other tech and finance giants – Spotify, Uber and Mastercard among them.

Use of Libra won’t require a bank account, allowing people to exchange multiple currencies into digital coins via banks and brokers through Facebook’s new network. The currency will run with blockchain technology, with the information stored across a network of computers and then held online in digital wallets designed to increase security and anonymity for users. According to Fortune, "the currency’s blockchain, which is open source, will be programmed in a new language developed by Facebook called Move. It will not only serve as a transaction record, but provide what one partner describes as an 'innovation layer' that invites third parties to build smart contracts and other blockchain-based services."

Facebook eventually hopes to have over 100 major commercial partners actively participating in the crypto. Foundation members include the companies mentioned prior, as well as Visa, PayPal, Coinbase, and venture capital firms like Andreesen Horowitz and Union Square Ventures.

Ultimately, Facebook's ultimate goal is to create a digital payment mechanism that transcends its 2.1 billion global users, instead becoming a tradable and secure digital currency used for online transactions. It'll work through the use of a new payment and storage system called Calibra, which can be used to transfer and pay for things online.

It's also designed to be the largest-scale solution yet to a very pressing problem in developing countries: the simple fact that 1.7 billion people worldwide, many of whom have access to a phone and therefore Facebook's platform, don't have access to traditional financial services like a bank or a debit card.

A noble goal, but after the royal mess that was Facebook’s data and security breach, whether users can trust the social media giant with their money is another thing entirely.

Via GQ Australia