Facebook revealed its long-awaited cryptocurrency plans Tuesday, announcing “Project Libra,” a new type of digital money designed for the billions of people using its apps and social network. If the plan is successful, users will soon be able to shop with and send the currency—known as Libra—on Messenger and Instagram, as well as use it with a wide variety of other merchants like Uber, Spotify, and MasterCard.
Facebook did not provide specifics about exactly when and how consumers will get ahold of the currency, but executives suggest it will first be distributed on Messenger and WhatsApp in mid-2020.
In addition, the company also announced a new digital wallet called Calibra, which will be operated by Facebook as a separate subsidiary and provide users with a way to store and spend Libra. The digital wallet, which won’t be available to the public for months, will display the value of users’ Libra in their local currency and provide a design similar to popular digital wallet Venmo for transferring money.
Facebook provided an image of Calibra’s design—including a three-wave symbol that serves as the Libra’s equivalent of a dollar sign.
In his long, and explanatory post about the currency, called Libra, Mark outlines quite a lot about how the currency would work, what the company aims to do with it, and of course, he takes quite some time reassuring people that it’ll be private, and their data won’t be shared with Facebook, but let’s break it down step by step.
So, Facebook has partnered with 27 organisations around the world to start a non-profit organisation called Libra Association, with the mission to “create a simple global financial infrastructure that empowers billions of people around the world.”
According to Mark’s post, the currency will be launched in 2020, and will be powered by the blockchain. With Libra, Facebook, and the Libra Association, are aiming to make mobile banking available to billions of people who don’t have a bank account, but do have mobile phones. Zuckerberg mentions that there are a billion people around the world that don’t have a bank account to their name, but use mobile phones.
With Libra, Zuckerberg says, the Association is hoping to make it easy for people to send and receive money, and to that end, he also announced a subsidiary called ‘Calibra’ that will build services to allow users to spend, send, and save the Libra currency. This will be available as a digital wallet in WhatsApp and Messenger, and later, as a standalone app sometime next year.
In his post, Zuckerberg makes it a point to emphasise that data shared with Calibra will be separate from that shared with Facebook, and says “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.”
According to Dante Disparte, the newly hired head of policy and communications for the Libra Association, “the goal really is to improve financial inclusion and do to the transfer of value and payments what the internet has done to the transfer of communication and information,” he told The Verge in an interview last week over video call from Washington, DC. While the Libra Association will have members based globally, it will be headquartered in Geneva, Switzerland.
In this way, Facebook is presenting its cryptocurrency as a democratizing societal force in the same vein as its efforts to make free online communication accessible globally. Just as Facebook has launched efforts around the world to bring people online, through its controversial Internet.org initiative and its Free Basics internet service, it’s now launching an effort to bring people free and low-cost banking tools. It remains to be seen whether Facebook’s banking and commerce initiatives manage to avoid the charges of digital colonialism that dogged its earlier efforts around internet accessibility.
“Blockchain and cryptocurrencies have a number of unique properties — they are decentralized, globally accessible, low cost, and safe. But the existing blockchain systems have yet to reach mainstream adoption,” reads Facebook’s blog post. “Mass-market usage of existing blockchains and cryptocurrencies has been hindered by their volatility and lack of scalability. Some projects have also aimed to disrupt the existing system and bypass regulation as opposed to innovating on compliance and regulatory fronts to improve the effectiveness of anti-money laundering.”