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What just happened? We knew that it was being developed, and now Facebook's confirmed it: the social network has officially announced that its cryptocurrency, Libra, will launch next year. The wallet will be available in its Messenger and WhatsApp platforms and also as a standalone app.
Facebook said it is forming a new subsidiary called Calibra, which aims to "provide financial services that will enable people to access and participate in the Libra network.” The first product to come from the company will be a digital wallet for Libra, the new global currency powered by blockchain technology.
Last week brought reports that the crypto is being supported by big-name backers including Visa, Mastercard, PayPal, and Uber Technologies. Facebook has confirmed that the wallet will be available in Messenger, WhatsApp and as a standalone app, with 2020 the expected launch date.
Facebook hopes Calibra will help those people for whom even the most basic financial services are inaccessible. "Almost half of the adults in the world don't have an active bank account, and those numbers are worse in developing countries and even worse for women," the company writes. "The cost of that exclusion is high -- for example, approximately 70 percent of small businesses in developing countries lack access to credit, and $25 billion is lost by migrants every year through remittance fees."
Facebook says Calibra will let you send Libra to anyone with a smartphone at low to no cost. Eventually, extra services will be introduced, such as using it to pay bills, ordering food by scanning a code, and riding public transport without the need for cash or travel passes. The aim is for Libra to eventually be used to buy anything.
Unlike a crypto such as Bitcoin, Libra is a stablecoin backed by real-world assets, meaning holders have “high degree of assurance” that they can convert coins into traditional currency based on an exchange rate.
Reuters writes that Libra will be bought by linking a bank account or, for those without access to banking, from physical locations like cash transfer businesses and convenience stores.
With Facebook’s questionable reputation for respecting people's privacy, getting people to trust in Calibra/Libra might not be easy, but the firm says it will not use the data for ad targeting, and user data will only be shared with Facebook and third parties when it has customer consent, or when law enforcement requests it.
Renewed optimism in cryptocurrency has seen Bitcoin’s price surge past $9,000 for the first time in 13 months.
Masthead credit: justplay1412 via Shutterstock