Libra, Facebook’s cryptocurrency project was unveiled on Tuesday, June 18, 2019 with the potential to change the financial and payments systems of the world. If it works, Facebook along with over 100 companies and non-profits will oversee the digital currency which will be powered by blockchain and set to launch in 2020.
Libra is projected to create a stable, digital currency which will be used across the world for purchasing anything online or even making bank loans and will also provide the ability for users to send money instantly and cheaper than a wire transfer anywhere in the world.
Facebook and other app developer companies will create apps for their users such as Facebook’s Wallet app which will plug into its WhatsApp or Messenger app to send the digital currency in the same way users send a GIF thread. Just to name a couple of other companies who are currently among the 27 companies already signed up for Libra are Paypal, Spotify and Uber.
This could be an enormously huge project! According to Statista, there are over 35 million people right now globally that use blockchain ‘wallets’ to hold their cryptocurrency which is a rough estimate of the number of people who currently participate in the markets.
Compare this to Facebook’s user base worldwide of 2.4 billion and you can see how massive this project could be. And it will be more user friendly than current cryptocurrency projects in place because apps will be designed by companies like Facebook or Spotify for example which are very user friendly.
We know that Facebook doesn’t embark on any project unless it will make a profit. To do so with Libra, Facebook has created Calibra which will be an independent subsidiary and will manage all of Facebook’s Libra developments and transactions. As Calibra creates products for users to interact with Libra, it will be making money for Facebook. And after it creates apps it will be making more money as it will sometimes charge a small fee but this fee will be a lot less than a wire transfer and it will be instant.
What will be unique to Libra is that users will not have to have a bank account which current cryptocurrency plans like Venmo need. Facebook is expecting Libra to become popular in developing countries where a lot of people don’t have bank accounts providing them with a more stable way of storing and spending their local currency.
The privacy of users’ of Libra will be protected as compared to current cryptocurrency companies which are transparent. According to Facebook, Calibra will not share any financial data belonging to its users nor will it target them with advertising and Calibra will use the same verification and anti-fraud processes as banks and credit companies use.