Facebook, the social networking giant is over 15 years old since it started on 4th February 2004 started only for Harvard students. Today it has over 2.4 billion active users monthly & has become one of the most used social networking sites.
In June, Facebook announced that they will be launching a new cryptocurrency called LIBRA and will be in the market by the first half of the year 2020. Project Libra has been developing a digital currency which can be used as the main currency to buy and sell things in the real world. In this project, cryptocurrency-based digital coins will be introduced on Facebook and other websites which can be used in the market.
Facebook has already spoken with financial firms and other online merchants and is seeking $1 Billion in financing for the project. Facebook is trying to conquer the blockchain network. It has already been in touch with online merchants like Visa, Mastercard & other payment processors to be the first ones to adapt to this platform and these digital coins are just like Bitcoins.
There will be zero or very fewer charges for international transactions hence can be used in the global market. This will create competition between companies like Western Union money transfer which charge more for cross-currency transactions. This aims to create one single currency which can be used anywhere in the world. Facebook is collaborating to stabilise the value of Libra in the global market.
In an interview, Zuckerberg had said, “I’m thinking about going back to decentralised or Blockchain authentication. Although I haven’t figured out a way to make this workout, this is around authentication and basically granting access to your information and to different services.“
To use Libra, you would just need access to a smartphone or a laptop which is connected to the internet and you will need access to an e-wallet named ‘Calibra’ which will handle all the transactions and will store the Libra coins. This wallet is compatible with applications which are designed by Facebook like WhatsApp, Facebook Messenger, etc. There will also be a standalone application which will enable users to make purchases or withdraw funds using the Libra Funds. It can be used either online or in local markets as ‘Calibra’ plans to allow real-time conversion to local currencies.
Facebook does not have a good reputation when it comes to user data and privacy. If the digital coins are misused, misplaced or get stolen then the company’s reputation will fall further down. Facebook will have to undergo a lot of scrutiny in many countries over their previous mishaps.
Facebook may not launch ‘Calibra’ in India as current regulations do not permit the use of a blockchain networking for banking transactions. Calibra will not be available in places where cryptocurrencies are banned, or Facebook is restricted or banned in the region. But Facebook is trying to launch the product globally. Hence we won’t know for certain how this system will work until the 2020 launch and how they curb the problems they faced and how they will improve on the privacy of the users and the regions Calibra will be launched.