Facebook launches its own currency: Facebook Libra is soon to be a globally valid form of payment. Is the digital company now switching to the financial infrastructure?
The claim is not exactly small: Facebook wants to establish a digital world currency. Libra is their name and from 2020, the financial infrastructure coming?
According to an official press release, the digital currency is supposed to be valid in all countries around the world. Then we should be able to easily send, save or spend Facebook Libra to other users.
What is Facebook Libra?
By definition, the Libra is to come on the market as a global cryptocurrency. A cryptocurrency is a digital currency. It’s called this because it uses a very secure form of cryptography to verify transactions.
The Libra is also based on the so-called blockchain technology. Blockchains are specialized databases that contain an ever-growing list of transaction records.
According to its own information, Libra is also fully covered by the Libra Reserve. This is a collection of currencies and other assets used as a backup for each new Libra.
For this, Facebook has also founded the organization “Libra Association” in Geneva. To begin with, around 30 companies are investing up to $ 10 million in the Libra project. These include major payment service providers such as Mastercard, Visa and Paypal, but also the large streaming service Spotify.
Facebook Libra: The first global money in history?
Facebook assures that the Libra will be convertible into legal tender such as Euro or US Dollar. The new currency would be the first global money in history.
The Internet Group has also founded a new subsidiary for this purpose. It’s called Calibra and promises to make global transactions easy.
“What if more people had a safe place to spend their money?” Asks Calibra on their own website. “What if money was just as cross-border as information exchange?” And finally, “What if there was a new currency for our world?”
Calibra: The digital wallet
Facebook believes that money should be easy. As easy as we can send a message or a photo. The right wallet for Facebook Libra comes as a feature in Facebook Messenger, in WhatsApp and as a separate app.
Calibra also promises that our money is safe thanks to “the same verification and anti-fraud mechanisms used by banks and credit cards,” as the website states.
This is how the transaction with Facebook Libra works
If Calibra 2020 is available, we’ll need to verify the digital wallet first. For this, we register with our official ID. Our identity is thus confirmed as that of all persons.
Then we can do business in the Facebook apps with the new cryptocurrency. However, the transactions should be chargeable. The costs are “low and transparent”, more concrete Facebook has not been.
By the way, we can also use the wallet if we do not have a Facebook, WhatsApp or Messenger account. The only requirement is that we verify our identity.
In the photo network Instagram, paying with Libra should not be possible at the beginning. At least, however, the assumption is obvious that Facebook is doing something to that effect. The shopping function of the app provides for the digital currency finally an ideal basis.
The Libra is a stable currency
Facebook Libra “is based on a secure, scalable and reliable blockchain designed to give all people worldwide equal access to financial services,” says Calibra’s website.
The Libra is therefore, a cryptocurrency such as the Bitcoin. This enabled the transaction to be the first digital currency in 2009 outside the financial system. However, the prices of virtual coins have always been fierce.
That should not happen to Facebook Libra. Finally, the currency is linked to legal tender.
Facebook Libra for business
The first version of Calibra will support so-called peer-to-peer payments and some other payment options such as QR codes. This gives companies the opportunity to accept Libra payments.
Later Facebook wants to introduce more payment options. This includes transactions in the business.