Facebook Wants to Do Away with Normal Money

Facebook has announced the launch of a new cryptocurrency called Libra. It aims to transform the way money moves around the world.

The details concerning Libra were released in its white paperThe new coin is set to launch in the first half of 2020.

Libra will let you buy things or send money to people with nearly zero fees. You will be able to pseudonymously buy or cash out your Libra online, or at local exchange points such as grocery stores.

Then you can spend it using third-party wallet apps or Facebook’s own Calibra wallet. Calibra will be built into WhatsApp, Messenger and the Facebook app itself.

“We’ve seen internet change the game for everything that could be digitized, except for money,” said David Marcus, the leader of Facebook’s Calibra division.

“The numbers really speak for themselves. There’s 1.7 billion people around the world that are unbanked, the same number are underserved by financial services.”

Marcus previously ran its Messenger division and used to be the president of PayPal.

“Now, anyone with a cheap smartphone has access to all the info they want in the world for free with a basic data plan,” he says. “Why doesn’t money work the same way?”

Libra explained

Libra will be run by a nonprofit, the Libra Association, to be based in Geneva, Switzerland.

The new coin will be backed by relatively stable government-backed money, unlike Bitcoin and other cryptocurrencies.

“If you buy $50 of Libra, your $50 makes its way to the Libra Reserve,” Marcus says. “It’s designed to be stable and confer values on Libra that makes it more like a traditional currency than any of the digital currencies are now. This is the way paper money was created.”

The Libra blockchain will be open-source. This means anyone can build a service or app that uses the currency. The wallets being developed for Libra are also designed to be interoperable.

That means you’ll be able to send money from Facebook’s Calibra wallet to any other digital wallet that also accepts Libra.