Social media platform Facebook has released a whitepaper detailing the technical aspects of its highly anticipated cryptocurrency, Libra, which is the culmination of over a year’s worth of work.
Libra, which is backed by a number of heavyweight companies including Visa, Mastercard, Uber and PayPal, is set to launch fully next year. Built on blockchain technology, Libra will enable users to send funds instantly via Facebook and its subsidiaries – WhatsApp and Messenger.
In addition, users will also be able to make online purchases via retail websites such as eBay and Booking.com with fees being lower than those offered by standard banks and credit card services. Facebook hopes Libra will attract the 1.7 billion adults who are without access to a traditional bank or those who are impeded by volatile local currencies in their home countries.
At present, 28 financial, e-commerce, venture capitalist and other tech firms have joined an independent body known as the Libra Association, each paying £8 million for admission. Based in Switzerland, the consortium will govern the currency to encourage trust in the system from financial regulators and users.
Within that group will be a governing body, the Libra Association Council, which will consist of a representative of each member of the association, and they will vote on policy and operating decisions. Eventually, the group’s founding members will all accept Libra payments, which means as of 2020 it may be possible to pay for Uber rides with digital currency.
The new digital token has arrived at a time when Facebook is facing intense scrutiny over its power, lack of responsibility and poor privacy practices, so it is hoped the association will help quash some of these concerns. Facebook will also join the association via its newly created subsidiary, Calibra, which is a digital wallet for Libra that securely stores users’ financial and social data.
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Due to Calibra’s heavy involvement in the creation of Libra, it could well become the largest cryptocurrency wallet within months of its launch. In order to gain a larger share of the market, Facebook will enable non-Facebook users to use Calibra via a separate iOS and Android app. The company has yet to reveal which countries the coin will launch in first; however, it has said that “almost anybody” in the world with a smartphone will be able to download the app.
Facebook has said Calibra will not share users’ financial details or transaction histories with its advertising department, but it is expected the company will take a small commission on merchant payments. Calibra will only share its users’ data with Facebook and third parties if the user consents to it. “Calibra customers’ account information and financial data will not be used to improve ad targeting on the Facebook, Inc family of products,” the company said.