June 18, 2019, 5:05 AM EDT
By David Ingram
SAN FRANCISCO — Facebook is going into the banking business.
The social networking company on Tuesday said it plans to help launch a digital currency in 2020, marking one of the company’s most aggressive moves yet to push beyond digital advertising.
A new nonprofit group based in Geneva, the Libra Association, will oversee the currency, called Libra. It will initially be backed by Facebook’s expertise but governed by 28 founding partners including payment firms Visa and Mastercard and internet companies eBay, Spotify and Uber.
Facebook said that it wants the currency to be available starting the first half of next year and that it believes many of the 2 billion people who are already on the company’s services will one day regularly use the new currency to buy things or send money internationally.
“The motivation for this is to effectively enable a simple global currency and financial infrastructure that empowers billions of people,” Dante Disparte, head of policy and communications for the Libra Association, told NBC News.
The project would bring a consumer-friendly version of digital currencies to smartphones around the world, potentially creating a way for people to easily transfer money, build credit and pay bills while avoiding costly fees. Libra is open source, meaning any company or person can build a business within its framework.
For example, a consumer could buy some Libra using dollars and save them in a digital wallet. That Libra could then be sent to a family member via WhatsApp messenger or used to pay a bill in a foreign country without having to worry about an exchange rate.
The project is the biggest step of any major corporation into the emerging realms of digital currency and blockchain technology, representing a vote of confidence that experiments in new forms of digital payments could be more than a passing fad. Blockchain is a decentralized system in which computers each contribute to a shared public ledger, allowing for secure transactions without a central authority.
Libra, named partly after a Roman unit for weight and currency, will have echoes of bitcoin, the popular cryptocurrency, but also some key differences — most notably that it will be governed by a central authority and that its value will be tied to other assets.
Facebook said it plans to offer financial services, possibly one day including loans, through a new subsidiary that specializes in Libra.
The price of bitcoin has rallied above $9,000 in recent days, the highest in more than a year, as news reports about Facebook’s plans raised expectations for digital currencies.
"Any cryptocurrency needs critical mass to have success, and you can't have more critical mass than Facebook,” said Jamie McCormick, managing director of Bitcoin Marketing, which helps companies launch products and services using cryptocurrencies. McCormick called Libra, “a very interesting development that will legitimize the industry.”
Facebook said it would keep data about people’s financial transactions separate from data about social networks, so that Libra information would not be used to target advertising on Facebook or Instagram.
Libra will not be exactly like bitcoin or other so-called cryptocurrencies that began emerging a decade ago. Cryptocurrencies are known for their decentralized nature, existing outside any central authority such as a government or large, corporate association.
And the Libra value will be pegged to a reserve of real, low-volatility assets, making it relatively stable compared to the notoriously fluctuating value of bitcoin, according to Facebook and the Libra Association. The reserve, or “basket,” will have assets “like bank deposits and government securities in currencies from stable and reputable central banks,” Facebook said.
Facebook to launch digital currency, Libra, in effort to create new global payment system
By David Ingram
SAN FRANCISCO — Facebook is going into the banking business.
The social networking company on Tuesday said it plans to help launch a digital currency in 2020, marking one of the company’s most aggressive moves yet to push beyond digital advertising.
A new nonprofit group based in Geneva, the Libra Association, will oversee the currency, called Libra. It will initially be backed by Facebook’s expertise but governed by 28 founding partners including payment firms Visa and Mastercard and internet companies eBay, Spotify and Uber.
Facebook said that it wants the currency to be available starting the first half of next year and that it believes many of the 2 billion people who are already on the company’s services will one day regularly use the new currency to buy things or send money internationally.
“The motivation for this is to effectively enable a simple global currency and financial infrastructure that empowers billions of people,” Dante Disparte, head of policy and communications for the Libra Association, told NBC News.
The project would bring a consumer-friendly version of digital currencies to smartphones around the world, potentially creating a way for people to easily transfer money, build credit and pay bills while avoiding costly fees. Libra is open source, meaning any company or person can build a business within its framework.
For example, a consumer could buy some Libra using dollars and save them in a digital wallet. That Libra could then be sent to a family member via WhatsApp messenger or used to pay a bill in a foreign country without having to worry about an exchange rate.
The project is the biggest step of any major corporation into the emerging realms of digital currency and blockchain technology, representing a vote of confidence that experiments in new forms of digital payments could be more than a passing fad. Blockchain is a decentralized system in which computers each contribute to a shared public ledger, allowing for secure transactions without a central authority.
Libra, named partly after a Roman unit for weight and currency, will have echoes of bitcoin, the popular cryptocurrency, but also some key differences — most notably that it will be governed by a central authority and that its value will be tied to other assets.
Facebook said it plans to offer financial services, possibly one day including loans, through a new subsidiary that specializes in Libra.
The price of bitcoin has rallied above $9,000 in recent days, the highest in more than a year, as news reports about Facebook’s plans raised expectations for digital currencies.
"Any cryptocurrency needs critical mass to have success, and you can't have more critical mass than Facebook,” said Jamie McCormick, managing director of Bitcoin Marketing, which helps companies launch products and services using cryptocurrencies. McCormick called Libra, “a very interesting development that will legitimize the industry.”
Facebook said it would keep data about people’s financial transactions separate from data about social networks, so that Libra information would not be used to target advertising on Facebook or Instagram.
Libra will not be exactly like bitcoin or other so-called cryptocurrencies that began emerging a decade ago. Cryptocurrencies are known for their decentralized nature, existing outside any central authority such as a government or large, corporate association.
And the Libra value will be pegged to a reserve of real, low-volatility assets, making it relatively stable compared to the notoriously fluctuating value of bitcoin, according to Facebook and the Libra Association. The reserve, or “basket,” will have assets “like bank deposits and government securities in currencies from stable and reputable central banks,” Facebook said.
Facebook to launch digital currency, Libra, in effort to create new global payment system
this was probably the plan all along. Them fakkits own the world wide banking system already