Facebook announces entry into cryptocurrency market with Libra

Facebook has announced its intention to make cryptocurrency mainstream with the launch of its own digital currency, Libra, which will be overseen by new financial services subsidiary Calibra.

The social network’s press release states that half of the world’s adult population doesn’t have a bank account, so the company would like to fill that gap, especially as the numbers are even worse in developing countries and among women.

The company plans to elevate the downtrodden out of poverty with the help of Calibra, a newly-formed financial services subsidiary that will serve as the gatekeeper to the Libra cryptocurrency network/market. The whole operation will be overseen by the Libra Association, an independent, non-profit organization based in Geneva that will manage the currency, which boasts 28 founding members, including Mastercard, Uber, Mercy Corps, and Andreesen Horowitz.

The Calibra digital currency wallet will be available in Messenger, WhatsApp, and as its own standalone app expected to launch in 2020, and will, the company hopes, make sending money as easy as sending a photo.

The tech giant has long-term plans to offer other financial services like paying bills, and says that making small transactions such as buying a coffee or taking public transport, will come “at low to no cost” while boasting “strong protections” to keep money safe by using the same verification and anti-fraud processes as major banks and credit cards.  

Pre-empting privacy concerns, the press release states that “Calibra will not share account information or financial data with Facebook or any third party without customer consent.” However, soon after that, the release states that data may be used in limited cases “to keep people safe, comply with the law.”

No direct mention was made of the 2018 Cambridge Analytica scandal involving the personally identifiable information of up to 87 million people, nor was the looming possibility of a US antitrust investigation against Facebook and its Silicon Valley brethren referenced.

The move has been met with some skepticism from crypto circles. Richard Dennis, founder of cryptocurrency marketplace Temtum, called the announcement “a complete contradiction of what cryptocurrencies are meant to be,” adding that “no one entity should hold [that much] power, the data or most importantly control user funds.”

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