Facebook unveils plans for Libra cryptocurrency

Facebook has linked with 28 partners in a Geneva-based entity called the Libra Association.
Facebook has linked with 28 partners in a Geneva-based entity called the Libra Association.PHOTO: REUTERS

SAN FRANCISCO/NEW YORK • Facebook yesterday revealed plans to launch a cryptocurrency called Libra, in its effort to expand beyond social networking and move into e-commerce and global payments.

Facebook has linked with 28 partners in a Geneva-based entity called the Libra Association, which will govern its new digital coin set to launch in the first half of next year, according to marketing materials and interviews with executives.

Facebook has also created a subsidiary called Calibra, which will offer digital wallets to save, send and spend Libras.

Calibra will be connected to Facebook messaging platforms Messenger and WhatsApp, which boast more than a billion users.

The Menlo Park, California-based company has big aspirations for Libra, but consumer privacy concerns or regulatory barriers may present significant hurdles.

Facebook hopes it will not only power transactions between established consumers and businesses around the globe, but also offer unbanked consumers access to financial services for the first time.

The name Libra was inspired by Roman weight measurements, the astrological sign for justice and the French word for freedom, said Mr David Marcus, a former PayPal executive who heads the project for Facebook.

"Freedom, justice and money, which is exactly what we are trying to do here," he said.

The Libra announcement comes as Facebook is grappling with public backlash due to a series of scandals, and may face opposition from privacy advocates, consumer groups, regulators and lawmakers.

It is not clear how lawmakers or regulators will react to Facebook making a push into financial services through the largely unregulated world of cryptocurrency.

In recent years, cryptocurrency investors have lost millions of dollars through hacks, and the market has been plagued by accusations of money laundering, illegal drug sales and terrorist financing.

Facebook has engaged regulators in the United States and abroad about the planned cryptocurrency, company executives said.

It hopes to bring global regulators to the table by publicising Libra, said Mr Kevin Weil, who runs product for the initiative.

Partners in the project include Mastercard, Visa, Spotify Technology, PayPal Holdings, eBay, Uber Technologies and Vodafone Group, as well as venture capital firms like Andreessen Horowitz.

They hope to have 100 members by the time Libra is launched.

Mr Jorn Lambert, executive vice-president for digital solutions at Mastercard, said a lot has to happen before the launch.

If the project receives too much regulatory pushback, he said, "we might not launch".

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 19, 2019, with the headline 'Facebook unveils plans for Libra cryptocurrency'. Print Edition | Subscribe