If we directly quote from the founder of Facebook Mark Zuckerberg this is what he said on his Facebook status.
Today, Facebook is coming together with 27 organizations around the world to start the non-profit Libra Association and create a new currency called Libra.
Libra’s mission is to create a simple global financial infrastructure that empowers billions of people around the world. It’s powered by blockchain technology and the plan is to launch it in 2020. You can read more about the association here: https://libra.org
Being able to use mobile money can have an important positive impact on people’s lives because you don’t have to always carry cash, which can be insecure, or pay extra fees for transfers. This is especially important for people who don’t have access to traditional banks or financial services. Right now, there are around a billion people who don’t have a bank account but do have a mobile phone.
We aspire to make it easy for everyone to send and receive money just like you use our apps to instantly share messages and photos. To enable this, Facebook is also launching an independent subsidiary called Calibra that will build services that let you send, spend and save Libra — starting with a digital wallet that will be available in WhatsApp and Messenger and as a standalone app next year.
Calibra will be regulated like other payment service providers. Any information you share with Calibra will be kept separate from information you share on Facebook. From the beginning, Calibra will let you send Libra to almost anyone with a smartphone at low to no cost. Over time, we hope to offer more services for people and businesses — like paying bills with the push of a button, buying coffee with the scan of a code, or riding local public transit without needing to carry cash or a metro pass.
In addition to our efforts, many other companies will build their own services using Libra — from payment companies like Mastercard, PayPal, PayU, Stripe and Visa, to popular services like Booking, eBay, Farfetch, Lyft, Spotify and Uber, to non-profits doing important work around financial inclusion like Kiva, Mercy Corps and Women’s World Banking, to companies in the crypto space like Anchorage, Coinbase, Xapo, and Bison Trails. A number of leading Venture firms are also joining to help drive innovation on the Libra network. We’re hoping to have over 100 cofounding members of the Libra Association by the time the network launches next year.
All of this is built on blockchain technology. It’s decentralized — meaning it’s run by many different organizations instead of just one, making the system fairer overall. It’s available to anyone with an internet connection and has low fees and costs. And it’s secured by cryptography which helps keep your money safe.
This is an important part of our vision for a privacy-focused social platform — where you can interact in all the ways you’d want privately, from messaging to secure payments.
Privacy and safety will be built into every step. For example, Calibra will have a dedicated team of experts in risk management focused on preventing people from using Calibra for fraudulent purposes. We’ll provide fraud protection so if you lose your Libra coins, we’ll offer refunds. We also believe it’s important for people to have choices, so you’ll have the option to use many other third-party wallets on the Libra network.
There’s still a lot more to learn and do before Libra will be ready to officially launch. We know it’s a major undertaking and responsibility — and we’re committed to getting this right. We’ve been working with policymakers and experts in areas like financial inclusion, economics, security, privacy and blockchain, and we’ll continue listening to their feedback as we figure out the best way to move forward. We’re thankful for their partnership, and for all the businesses, organizations, and academic institutions that are part of the Libra Association.
This is the beginning of an exciting journey and I’m looking forward to sharing more soon.
– Mark Zuckerberg, 18th June 2:12 AM
The Future of Global Money
It was no surprise that the tech giant wants to take part in the crypto world. We already know that the world is going to use electronic money at some point.
The exchange, different conversion rate, different country with different currencies, all of these will be gone. Everyone will do business, travel and regular things with a simple one currency.
This feels like a dream for everyone. But, things are not that simple. We have seen the one currency effect in Europe over the Euro. It wasn’t a wide success.
Cryptocurrencies like Bitcoin are there for some time, but they didn’t get much popularity among the general people. It is true that some banks and online services tried to adopt them in the mainstream. Although it is very debatable how many people use them regularly.
Why Libra will be Popular?
Facebook is playing a different game here. They are not into bitcoin, but they will use the same concept.
The blockchain technology is not much different than already used by other cryptocurrencies, but one thing they lack is the support, which Libra has.
Facebook has a lot of users and already created a huge market, you admire it or not.
They can just through a new currency over their messenger application and billions of people will get notified within a day or two.
A cryptocurrency is successful when everyone accepts it and it has popularity. Demand and supply always work for any product.
Facebook can create that super easily than any other competitors.
We actually see a future here.
Facebook has a planned way to develop their currencies via already available monetary authority and will follow the rules for each country.
They will get help and approval from the government, nobody can take it down once it is popular.
We already have so many digital wallets in action and there are also cryptocurrencies available in the market, how Facebook is going to compete them?
We actually see no big competition rather than PayPal. PayPal money is widely used in most of the countries.
But you know what… PayPal is going to be one of the Partners of the Libra.
The thing is like everyone out there is going to onboard in the same ship to create a worldwide currency. You can convert any acceptable currencies into Libra and Libra is convertible to anywhere in the world.
Who is going to compete?
Privacy can be a big Issue
At the end of the day, it is just another Payment service that is going to eat up most smaller companies. But, we have a very deep concern regarding the fact that Facebook is not very good at keeping things private.
Your data, your money everything can vanish within a second, you will have nothing to do.
Another fact you should remember, Facebook is gaining power by each product it launches.
Who knows… it might be the start of a new era for everyone who loves the internet economy.