The top secret digital currency that Facebook have been working on over the past year has been revealed.
Facebook’s blockchain team has been developing their new ‘Libra’ cryptocurrency that diverts from the traditional financial systems. Instead they opt for fast, cheap and secure online payments via smartphone with their own currency.
There are over 12 companies involved in the investment process, and the buy in is a whopping 10 millions dollars each.
Mastercard, Paypal, Ebay, Uber and Spotfy have all invested the buy-in amount to become part of the governing team of this nonprofit foundation.
At a press release, Facebook explained:
“Our hope is to create more access to better, cheaper, and open financial services – no matter who you are, where you live, what you do, or how much you have.”
A New App Where All The Magic Happens
The new cryptocurrency won’t be available until 2020, but Facebook is working on bringing in more companies to back the project until the release date.
Facebook also announced they will release Calibra: an app that will allow users to send and receive the cryptocurrency across borders, via smartphones.
These transfers won’t include the big fees that the financial industry implement.
The company seem focused on reaching the 1.7 billion people across the world that are ‘unbanked’. They intend to give them options for starting businesses and much more.
In the statement, Facebook said:
“Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people.”
Two Causes For Concern
There are some causes for concern that Facebook will need to iron out in the coming months before the release of Libra.
Will Cryptocurrency Take Off?
Cryptocurrency such as Bitcoin reached great heights back in January 2019, however they have since halved in value.
The cryptocurrency market seems to have calmed down, but has proven to be a very volatile industry to be in.
Will this new endeavour be able to succeed?
Can People Trust Facebook?
The second concern is something that Facebook has more control over: their own public image.
Over the past few years, Facebook has suffered huge backlash for mishandling their users private information.
They have experienced scrutiny at their inability to protect the private information of its users, and this leap to cryptocurrency will demand a lot of trust.
Data protection is of course a massive responsibility for banks, or organisations that handle financial transactions.
As a result, initial confidence in Libra will likely be low.
With the amount of money and businesses backing Facebook in this endeavour though, business owners should remain invested in the progress of this new cryptocurrency.
This move definitely has the potential to shape the financial industry as we know it.
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