Today, Mark Zuckerberg (CEO of Facebook Inc) announced Libra, a new global currency via his Facebook profile. Libra is a simple global currency and financial infrastructure that is set to empower billions of people worldwide. The simple reason for this is to reinvent money and transform the global economy so that people everywhere can live better lives
As stated, Libra which is to be launched in 2020 will be powered by one of the digital transformation enablers, namely Bitcoin Technology. The Bitcoin technology enables decentralization (run by many different organizations instead of just one entity), accessibility (available to anyone with an internet connection), low costs and security (secured by cryptography which helps keeps money safe). However, it will adopt a similar system as mobile money which enables people (who don’t have a bank account but do have a mobile phone) to carry less cash.
Facebook Inc together with other 27 organizations in the association around the world hopes to leverage the platform’s network effect created when people use Facebook apps (Messenger, and WhatsApp) to instantly share messages and photos. They aspire to make it easy for everyone to send, save and receive money instantly around the world, starting with a digital wallet that will be available in WhatsApp and Messenger and as a standalone app next year.
Privacy, Security and Regulation for Libra
Privacy and safety will be built into every step.
Privacy – Any information you share while using the app will be kept separate from the information you share on Facebook.
Security – The new global currency will be secured using the security features provided by the blockchain technology [learn more here]. It will also have a team of dedicated experts in risk management focused on preventing people from fraudulent purposes.
Regulations – It (an independent subsidiary called Calibra) will also be regulated like other payment service providers.
How Does Libra Work?
Starting in 2020, Calibra will let you send Libra to almost anyone with a smartphone at low to no cost. Thereafter, as more people use the currency, additional services for people and businesses will be added. You will be able to pay bills with the push of a button, buying coffee with the scan of a code, or riding local public transit without needing to carry cash or a metro pass.
To make Libra acceptable worldwide, Facebook Inc and many payment companies (Mastercard, PayPal, etc.), popular payment services (eBay, Spotify, etc.), non-profits (Kiva, Mercy Corps, etc.) and crypto companies (Coinbase, etc.) joins the ecosystem and build their own services using Libra. In addition, many venture firms will be joining to help drive innovation further on the Libra network.
Libra is set to change the world but there is still a lot more to learn and do before it becomes a globally used currency. I am looking forward to how this will go in terms of development for people, businesses and nations. Also, looking forward to Facebook Inc and the organizations getting this right with policymakers and experts in the area of finances – economics, security, privacy etc.