The news that Facebook is going to create its own cryptocurrency, Libra, spread all over the world almost immediately. But the project is much deeper and broader, and it is not only about a new crypto.
The basic goals of Libra
The whole world is excited about the fact that Facebook intends to create its own cryptocurrency, named Libra. In fact, it is not surprising, because there are thousands of cryptocurrencies released by various companies.
But the project of the social media giant is slightly different from other projects based on the blockchain technology. First of all, Libra will work directly through WhatsApp and Facebook Messenger. It is quite obvious that Facebook has huge revenues from micropayments. If payments are not made via traditional currencies (fiats), but only via Libra, rate profits would be much higher. However, this is not all we need to know.
Money and the blockchain for everyone
Very important thing is that Facebook creates a subsidiary company, officially named Calibra, which will be responsible for the launch and development of the financial services and software based on blockchain. Calibra is going to create a professional digital cryptocurrency wallet and integrat it into other Facebook’s products and services. In other words, if the project succeeds, for the very first time millions of people in the streets would have real access to cryptocurrencies’ world. Well, one day it had to happen.
But the whole thing is not only about Facebook services and micropayments. Not only cryptocurrency and Calibra are going to be created, but also the non-profit Libra Association, which will be made up of some huge Facebook partners. Now, it is known that the giant is going to cooperate with Visa, Mastercard, Lyft, PayPal, eBay and even Uber. With such a board the company would be much closer to become a global financial institution, like a bank, offering credits and money transfers.
A dead duck? The trust problem
The project is planned to operate in the first half of 2020, but its success is very doubtful and the idea has already been repeatedly criticized. It can be said that the company is tearing up from all parts of the world. The French finance minister said that there is no possibility that Libra would become an independent currency. Democratic politicians in the U.S. are calling for the work to be stopped on the whole project until it is properly supervised. The Senate of the U.S. will hold a special hearing next month concerning on Libra.
For a long time now, Facebook has been struggling with the problem of trust. The Cambridge Analytica affair clouded optimism towards the company. In my opinion, the future of the project largely does not depend on Facebook itself, but on the politics of its largest partners. Another thing is the regulation of cryptocurrencies, which sooner or later will appear.