Yesterday, Facebook finally revealed details about its highly anticipated Libra currency. Media claims that the new digital coin could take over the way consumers spend their money, although some are concerned about its security.
Libra’s whitepaper was unveiled yesterday, while the coin itself will be launched along with its Calibra wallet in 2020. According to The Wall Street Journal, Libra is backed by at least a dozen corporate heavyweights including such big names as Visa, Mastercard, PayPal and Uber, signifying that even mainstream financial and e-commerce companies have recognised strong potential in the token. Each member of the consortium known as the ‘Libra Association’ that governs the coin will invest about $10 million in order to fund its creation.
The Calibra digital wallet will allow users to make money transfers to each other as well as purchases all across the internet with the Libra cryptocurrency, which is going to be a stablecoin. It will be transferable at little to no cost via Facebook products including Messenger and WhatsApp. With almost 2.4 billion active users on Facebook alone, this could completely alter digital cashless spending.
Although Libra is expected to be controlled by an independent foundation, it is likely that Facebook will have a big influence over the coin. Yet members of the consortium seem willing to take on the risk in return for the large audience that Facebook brings. Likewise, card companies such as Visa and Mastercard have had long-standing worries that a major technological development in payment options would take them out of business, so joining in with Libra would allow them to keep up with the advancements.
However, critics such as Techcrunch have already speculated that the Libra Blockchain’s open access will make Libra more susceptible to another Cambridge Analytica scandal – but this time with higher stakes. Rather than user data being hijacked, the low barriers meant to promote “innovation” would make users vulnerable to their money being stolen, perhaps hundreds of thousands of dollars.
Nevertheless, Facebook is still in the early stages of developing Calibra, so more security features may yet be added.