After much speculations and rumors, Facebook has finally unveiled its blockchain plans following numerous rumors about its ‘GlobalCoins’ project. Today, the company announced that the global cryptocurrency will actually be called ‘Libra‘.
Besides cryptocurrency Libra, which will launch in 2020 along with a blockchain-based network, Facebook is also launching a digital wallet called Calibra, which will have its own app and be built into WhatsApp and Messenger.
Calibra promises to keep your crypto dealings and your Facebook data private.
Founding members of the Libra Association, a not-for-profit which oversees the token’s development, includes Visa, Uber, Lyft, Spotify, PayPal, Mastercard, Stripe and Andreessen Horowitz, to name a few.
Facebook, Calibra and these other founding members will earn interest on the money users cash in (it will be held in reserve to keep Libra’s value stable)
In the white paper Facebook published today, the company states its mission is to “enable a simple global currency and financial infrastructure that empowers billions of people.”
“The world truly needs a reliable digital currency and infrastructure that together can deliver on the promise of “the internet of money,” said the Whitepaper.
Securing your financial assets on your mobile device should be simple and intuitive. Moving money around globally should be as easy and cost-effective as — and even more safe and secure than — sending a text message or sharing a photo, no matter where you live, what you do, or how much you earn. New product innovation and additional entrants to the ecosystem will enable the lowering of barriers to access and cost of capital for everyone and facilitate frictionless payments for more people, says Facebook in its whitepaper.
Between the lines, Facebook may be poised to scale a global cryptocurrency (more so than Bitcoin or Ethereum). In Facebook’s words: “Mass-market usage of existing blockchains and cryptocurrencies has been hindered by their volatility and lack of scalability, which have, so far, made them poor stores of value and mediums of exchange.”
On the selling side, Facebook has relationships with 7 million advertisers and 90 million small businesses. On the consumer side, it’s estimated that 2.1 billion people use Facebook (which includes WhatsApp, Instagram or Messenger) each day.
If successful, Libra could become something akin to the next PayPal — an easy to set up payment method that’s universal and decentralized. Ironically, David Marcus, co-creator of Libra and long-time Facebook exec, is the former President of PayPal. It could also become a competitive banking system by offering access to folks in developing countries, reducing money transfer fees through Calibra and offering loans and credit to users.
The initial group of organizations that will work together on finalizing the association’s charter and become “Founding Members” upon its completion are, by industry:
- Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
- Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, MercadoPago, Spotify AB, Uber Technologies, Inc.
- Telecommunications: Iliad, Vodafone Group
- Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
- Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
- Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking