Facebook Reveals Launch Plans For Libra, Its Crypto Answer To Bitcoin

Lloyd Doyle
June 19, 2019

Real-world currency used to buy Libra will go into a reserve backing the digital money, the value of which will mirror stable currencies such as the U.S. dollar and the euro, according to its creators.

Facebook has announced plans to dive headfirst into cryptocurrency, with an offering that allows peer-to-peer payments as well as purchases on the Facebook platform. It is created to be a stable coin that will run on the blockchain secured by over 100 distributed computer servers worldwide, which will allow users to send money to each other for little to zero fees.

Here's what Facebook users need to know about Facebook's digital currency.

The Libra will not be managed by Facebook itself.

The details: The Libra team will be governed by a nonprofit foundation called Calibra, based in Switzerland.

In addition to having its own standalone app, Libra would also be available through Facebook Messenger and WhatsApp, which is owned by Facebook.

Calibra would conduct compliance checks on customers who want to use Libra, using verification and anti-fraud processes that were common among banks, Facebook said.

The association´s Dante Disparte said it could offer online commerce and financial services at minimal cost to more than a billion "unbanked" people - adults without bank accounts or those who use services outside the banking system like payday loans to make ends meet. France's finance minister said he had asked central bank heads from G7 countries to write a report on the project by mid-July.

"The best way I can understand this is: the Libra "privacy" story is going to be that you can deposit your money into Facebook".

Before Tuesday's announcement, Facebook was already facing significant backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 United States presidential election.

Some have called for Facebook to incur penalties, or be forcibly broken up, for mishandling user data, and not preventing Russian interference in the 2016 U.S. presidential election through a social media disinformation campaign.

Developers say the currency's name, Libra, was inspired by the Roman unit of weight measure, the astrological symbol for the balance of justice, as well as the French word for freedom: "liberté".

The group aims to raise money through a private placement in coming months. The market has also faced money-laundering and terrorist-financing allegations. Unlike other cryptocurrencies, Facebook emphasized, Libra is backed by "a reserve of real assets", with an equivalent amount of real currencies and assets held in reserve for every Libra that is created.

Facebook said it won't share account information or financial data with Facebook or any third party without a users' consent - meaning that account information can't be used to improve Facebook's ad strategy.

Since then, thousands of bitcoin alternatives have launched, and Facebook is just one of dozens of blue-chip companies dabbling with the underlying technology. "The mission for Libra is a simple global currency and financial infrastructure that empowers billions of people".

Though there were no banks among the inaugural members, there had been discussions with lenders who were waiting to see how regulators and consumers responded to the project before deciding whether to join, Jorn Lambert, executive vice president for digital solutions at Mastercard, said.

Other reports by Iphone Fresh

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