Facebook has finally revealed the details of its cryptocurrency Libra. From a blog post: Today we’re sharing plans for Calibra, a newly formed Facebook subsidiary whose goal is to provide financial services that will let people access and participate in the Libra network. The first product Calibra will introduce is a digital wallet for Libra, a new global currency powered by blockchain technology. The wallet will be available in Messenger, WhatsApp and as a standalone app — and we expect to launch in 2020. […] 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 — approximately 70% of small businesses in developing countries lack access to credit and $25 billion is lost by migrants every year through remittance fees. This is the challenge we’re hoping to address with Calibra, a new digital wallet that you’ll be able to use to save, send and spend Libra.
From the beginning, Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost. And, in time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass. When it launches, Calibra will have strong protections in place to keep your money and your information safe. We’ll be using all the same verification and anti-fraud processes that banks and credit cards use, and we’ll have automated systems that will proactively monitor activity to detect and prevent fraudulent behavior. We’ll also offer dedicated live support to help if you lose your phone or your password — and if someone fraudulently gains access to your account and you lose some Libra as a result, we’ll offer you a refund. Facebook’s currency is backed by more than two dozen companies ranging from Visa and Mastercard to Lyft and Spotify. Apple, Google, Amazon and Microsoft have not yet signed up. Banks decided not to join the starting roster because of uncertainties about regulation and concerns over logistical issues that could hamper take-up, Financial Times reported citing several industry executives. From the report: If successful, the project could dramatically reshape some corners of the finance industry, disintermediating payments platforms and stealing business from retail banks and fintech groups, particularly those that specialise in sending payments across borders. Jorn Lambert, executive vice-president for digital solutions at Mastercard, said he was not worried that fee-free transactions would threaten the payment card business. “It’s an addition to what we do, not instead of what we do. It is not a zero-sum game. Today, 85 per cent of transactions are made in cash.” It is unclear whether Libra will clear the steep hurdles needed to get off the ground, win over regulators, such as the US Securities and Exchange Commission, and be embraced, or strongly resisted, by the financial services industry. Central banks have already questioned the impact of company-created cryptocurrencies on financial stability. “We see hurdles to scale, we see hurdles to adoption, we see enough of this to decide that we would not participate in a scheme like this,” said a senior payments executive at a large global bank.