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here’s what it’s all about

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Facebook has today announced a new cryptocurrency, Libra, and a digital wallet to support it, Calibra. Facebook revealed the new ventures via its Newsroom website, marking a great leap into the financial market for the social platform.

Facebook is positioning Calibra as a simple, secure, and accessible way to conduct financial transactions. It seems predominantly aimed at those who aren’t already banking; Facebook says around half of the world’s adults don’t have a bank account, but many of them have a smartphone, internet access, and a Facebook account. As well as funds, it looks like that’s all you’ll need to get started with Libra.

From the start, users will be able to send Libra to other people as easy as sending a text message, said Facebook. The company said in the future it also hoped to add more services 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.”

It looks like Libra will also dodge the fluctuating nature of other cryptocurrencies with a reserve of real assets. The Libra Reserve is what Facebook says will maintain the cryptocurrency’s stability, so buying it won’t feel like (as much of) a gamble as with other digital currencies.

The Calibra digital wallet will be accessible as a standalone app, and will also be integrated into Messenger and WhatsApp, when it launches with the Libra cryptocurrency sometime in 2020. Facebook offered a quick glimpse of what it looks like, which you can check out below:

Facebook Calibry wallet screenshots on three phones. Facebook Newsroom

About the Libra Association

The Libra cryptocurrency platform is backed by an independent, not-for-profit organization headquartered in Geneva, Switerzland. The so-called Libra Association was founded by a number of major tech and finance companies, each of which contributed $10 million to the venture (says The Guardian). Facebook claims it will have just as much power over the cryptocurrency’s development and evolution as any of the other companies involved, which include Mastercard, PayPal, Visa, eBay, Lyft, Spotify, and Uber.

What’s it all mean?

Facebook’s Libra whitepaper talks about inherent problems with the regular banking world — it believes blockchains and cryptocurrencies offer certain advantages, particularly in “accessibility and trustworthiness.” So it looks like Facebook will act as a sort of stand-in bank for those who — for any number of reasons — are either unable or refuse to take part in regular banking.

It sounds like a reasonable service to fill a genuine market gap; however, there will be big questions regarding privacy, which Facebook has had a poor track record of lately. For its part, Facebook said: “Aside from limited cases, Calibra will not share account information or financial data with Facebook or any third party without customer consent.” I do wonder what those limited cases are, though.

We’ll have more on Libra and Calibra in the coming weeks. Until then, give us your impressions of it in the comments.

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