The stated aim of Libra, the Facebook cryptocurrency, is to bring financial services to the world’s 1.7 billion unbanked citizens. As questionable as the motives of Facebook might be, they could easily succeed where everyone else has failed. Facebook has created a new subsidiary, known as Calibra, to manage its venture into the world of cryptocurrency.
Libra will allegedly allow holders to send money to people at zero cost. First of all, it needs to be said that this is a potential masterstroke by Mark Zuckerberg. If it works, he will be connecting the world of finance with the world of social media, through the biggest platform in the world with over 1 billion users. The fact that fees are tiny is of no consequence with such a large adoption – the revenue share would be huge.
Facebook claims that the coin can be sent pseudo-anonymously. Needless to say, this claim can be taken with a barrel of salt, from the corporation with such a poor track record of safekeeping data, with a CEO who stated that Facebook users were dumb for giving him their personal information.
Customers can expect all of their transactions to be fully monitored. In the event of fraudulent activity, Facebook will hand over all personal data to the authorities. Yes, tying finance to a social media platform might seem novel and convenient. But it is also a libertarian’s worst nightmare.
It’s hard to say what the exact impact of Libra is going to be in terms of the wider cryptocurrency market. There is a strong argument that it will water it down even further. With a cryptocurrency coin for every government and every corporation, the initial idea of Bitcoin, which was a move away from both centralized government and corporate control, fades further and further away.
On the other hand, it will make it easier for the globe as a whole to come to terms with cryptocurrencies. It will break down barriers for access. Even people in third world countries can be active on Facebook, once there is an internet connection and smart devices available.
It could help to do what no government incentive has done before – provide these citizens with a means of financial access that is free. This could push the price of bitcoin and similar coins upwards, but it would also water down their real value.
Libra is likely to be successful. Simply because Mark Zuckerberg, and Facebook, are ruthlessly effective in making money. For all of their public scandals. Facebook has grown its revenue by over 25% for 22 consecutive quarters, as of the time of this writing.
Libra is set to be released sometime in 2020. Other members include Mastercard, Visa, PayPal. eBay and Vodafone. The project is too big to fail and will bring cryptocurrency to the masses. Whether this is good or bad news for the wider cryptocurrency industry remains to be seen, but it definitely raises a host of serious concerns in the realm of personal privacy.