Data-driven insights that help companies navigate the changing retail and technology landscape. LEARN MORE
Flash Report

Facebook Announces its New Digital Cryptocurrency: the Libra

#
Coresight Research

Key Points

On June 18, 2019, Facebook launched a new subsidiary named Calibra, whose first project is a digital wallet for a new global currency called Libra that is powered by blockchain technology but backed by real assets.

  • The wallet will be available in Messenger, WhatsApp and as a standalone app. Its launch is expected in 2020.
  • One of the motivations for Libra is that nearly half the adults in the world lack an active bank account – particularly in developing countries – and migrants spend $25 billion annually on remittance fees.
  • Calibra promises the ability to send payments to nearly anyone or pay bills with a smartphone as easily as sending a text message at little or no cost. The platform also promises to offer strong security protections using the same verification and anti-fraud processes that banks and credit cards use, in addition to automated systems that will proactively monitor activity to detect and prevent fraudulent behavior, as well as protect user privacy.
  • Facebook has signed up 27 companies to back the new cryptocurrency, including Visa, Mastercard, PayPal and Uber.
  • Coresight’s take: The concept sounds intriguing and has received important validation from major financial institutions; however, Libra’s arrival remains “a long way from launch” according to COO Sheryl Sandberg, and Calibra faces regulator concerns as well as a skeptical public following consumer privacy concerns following the prior misuse of the company’s data.

On June 18, 2019, Facebook launched a new subsidiary named Calibra, whose first project is a digital wallet for a new global currency called Libra that is powered by blockchain technology but backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks.

The wallet will be available in Messenger, WhatsApp and as a standalone app and its launch is expected in 2020. An illustration of the wallet appears below.

Source: Facebook

 

 

One of the motivations for Libra is that nearly half the adults in the world lack an active bank account, particularly in developing countries, and migrants spend $25 billion annually on remittance fees.

Calibra promises the ability to send payments to nearly anyone or pay bills with a smartphone as easily as sending a text message at little or no cost. The platform also promises to offer strong security protections using the same verification and anti-fraud processes that banks and credit cards use, in addition to automated systems that will proactively monitor activity to detect and prevent fraudulent behavior, as well as protect the users’ privacy.

Facebook commented that, aside from limited cases, Calibra will not share account information or financial data with Facebook or any third party without customer consent. The company stressed that Calibra customer account information and financial data will not be used for ad targeting on Facebook or the company’s other products.

Facebook has signed up 27 companies to back the new cryptocurrency, including Visa, Mastercard, PayPal and Uber. The figure below shows Libra’s partners, which includes investors, payment companies, Internet companies, nonprofits and telecom carriers.

 

Source: Facebook

Other research you may be interested in:

×