Libra will be a “stable currency built on secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association,” according to the company’s white paper.
This means that Facebook won’t have full control of Libra. Instead, TechCrunch reported, it’ll have a single vote in Libra’s governance like the other founding members of the Libra Association, including Visa, Uber, and Andreessen Horowitz. Each of them has invested at least $10 million each into Libra already.
On its website, Libra’s mission is described as:
“A simple global currency and financial infrastructure that empowers billions of people. Reinvent money. Transform the global economy. So people everywhere can live better lives.”
Essentially, anyone with a smartphone will be able to use Libra to make payments and send money globally without dealing with any fees. With this cryptocurrency, Facebook is trying to make a service for the unbanked, who lack access to traditional financial services.
“Working together, technology companies and financial institutions have also found solutions to help increase economic empowerment around the world,” the company’s white paper said. “Despite this progress, large swaths of the world’s population are still left behind: 1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone.”
Facebook also launched Calibra, its digital wallet. The site is meant to handle Facebook’s cryptocurrency and protect your privacy, so Libra payments don’t get mixed up with Facebook data, TechCrunch reported.
However, Calibra’s Approach to Consumer Data Privacy says that account information or financial data won’t be shared with Facebook or any third party without consumer consent — except in “limited cases.”
An example of one of those “limited cases” is: “When you authorize a payment, we share data with third parties necessary to protect that transaction. We also share Calibra consumer data with managed vendors and service providers — including Facebook, Inc…,” according to the screenshot.
Facebook’s plan to get into cryptocurrency may seem exciting, but there are a lot more questions than answers. Ultimately, this is Facebook creating its own currency, and aiming to make it a global player in how we spend our money.