Facebook confirms launch of crypto-currency, Libra

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 18 Jun 2019

Facebook, the world’s biggest social networking platform, has today confirmed plans to launch Libra, its own crypto-currency.

This after reports surfaced last month that the social media doyen had was looking to unveil a digital currency.

“Today we’re sharing plans for Calibra, a newly formed Facebook subsidiary whose goal is to provide financial services that will let people access and participate in the Libra network,” says Facebook in a statement.

It notes that the first product Calibra will introduce is a digital wallet for Libra, a new global currency powered by blockchain technology.

The wallet will be available in Messenger, WhatsApp and as a standalone app – and Facebook expects to launch in 2020.

“If you have an Internet connection today, you can access all kinds of useful services for little to no cost – whether you’re trying to keep in touch with family and friends, learn new things or even start a business. But when it comes to saving, sending and spending money, it’s not that simple,” the company says.

It adds that for many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account and those numbers are worse in developing countries and even worse for women.

According to Facebook, the cost of that exclusion is high – approximately 70% of small businesses in developing countries lack access to credit and $25 billion is lost by migrants every year through remittance fees.

“This is the challenge we’re hoping to address with Calibra, a new digital wallet that you’ll be able to use to save, send and spend Libra.”

It explains that from the beginning, Calibra will let users send Libra to almost anyone with a smartphone, as easily and instantly as they might send a text message and at low to no cost.

“And, in time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass.”

The social networking company notes that when it launches, Calibra will have strong protections in place to keep users’ money and information safe.

“We’ll be using all the same verification and anti-fraud processes that banks and credit cards use, and we’ll have automated systems that will proactively monitor activity to detect and prevent fraudulent behaviour. We’ll also offer dedicated live support to help if you lose your phone or your password – and if someone fraudulently gains access to your account and you lose some Libra as a result, we’ll offer you a refund.

“We’ll also take steps to protect your privacy. Aside from limited cases, Calibra will not share account information or financial data with Facebook or any third-party without customer consent.”

Meanwhile, local crypto-currency exchange Luno says the adoption of crypto-currencies in developing countries has been well-documented and the anomaly is often flagged that people who have less appear to take greater financial risks.

Luno research findings indicate that the Facebook coin, Libra will find an open market in SA and other developing markets.

It says as large global tech firms start to move into blockchain and altcoins, the research shows why early adopters, the most important audience for these firms, will probably come from emerging markets.

Marius Reitz, Luno GM: Africa says: “As some of the world’s largest tech giants announce they are launching crypto-currency coins, we believe developing markets will be the lead adopters. Our research shows that in these markets people are more financially savvy because they have to be, which means that they need and understand the benefits the new coins can offer.

“These markets are also more likely to exhibit grassroots level adoption (versus institutional)” says Reitz. “In almost every emerging market country surveyed, over half of the people said they would turn to family, friends or colleagues for financial advice over government organisations which shows that people in these markets rely on information from those closest to them”