Facebook’s Libra money is coming in 2020
Facebook, Visa, Mastercard, PayPal, Uber, eBay and 23 other online commerce brands have announced a plan to establish a new online currency for Facebook called Libra.
Facebook has also established a new digital wallet service called Calibra which will connect to Messenger and WhatsApp so users can save, send and spend Libras.
Libra, unlike other ‘crypto-currencies’ will be backed by real money deposited by Facebook in real bank accounts to support the value of the online currency.
Users will be able use Libra to make purchases on Facebook, eBay, Booking Holdings, Farfetch, Lyft, MercadoPago, Spotify and Uber Technologies. The list will grow with Facebook looking to grow the Libra network.
Facebook says Libra will be “a simple global currency and financial infrastructure that empowers billions of people.”
“For many people around the world, even basic financial services are still out of reach: 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 cost of that exclusion is high, … $25 billion is lost by migrants every year through remittance fees.”
“Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message,” said Facebook.
But not everyone is a fan of a new Facebook currency and money system.
“Given its history of managing data, it should not take much to convince people that Facebook managing our money is probably a terrible idea,” said Neil Campling from TMT Research / Mirabaud Securities.
Facebook’s Libra money “literally threatens the governments that issue currency, the banks that store it and the actual transmission network,” said Jason Brown, co-founder of payment app developer Tally Technologies, told CNBC yesterday.
Facebook’s Libra plans have prompted debate in Europe and senior German politician and member of the European Parliament Markus Feber is now calling for new rules for online money.
“This would be a good reason for the European Commission to start work on a proper regulatory framework governing the rules of virtual currencies.”
Facebook said “Calibra will have strong protections in place to keep your money and your information safe, we will be using all the same verification and anti-fraud processes that banks and credit cards use.
“If someone fraudulently gains access to your account and you lose some Libra as a result, we’ll offer you a refund.”
The name “Libra” was inspired by Roman weight measurements, the astrological sign for justice and the French word for freedom said David Marcus, Facebook’s head of Libra.