Facebook announces Libra, a cryptocurrency that aims to shake up global finance

Facebook has been working to expand its business beyond social media and is entering the e-commerce and payments market. In line with this, the company has today revealed its plan about launching a cryptocurrency called Libra.

The digital currency called Libra will allow its billions of users to make financial transactions across the globe. It is being touted as a means to connect people who do not have access to traditional banking platforms.

It could also be a welcome lift to Facebook’s profits. Analysts are suggesting that Libra could be a huge moneymaker for Facebook. It is also arriving at a time when the company’s growth has slowed down.

The social media platform currently has close to 2.4 billion active users and its digital currency Libra could be the financial game changer that could shake the global financial system. However, it is likely to face scrutiny as Facebook continues to reel from a series of privacy scandals.

Facebook said that it won’t fully control Libra, but instead get just a single vote in its governance like other founding members of the Libra Association, which includes Visa, Uber, and Andreessen Horowitz who’ve invested at least $10 million each into the project’s operations.

The association will promote the open-sourced Libra blockchain and developer platform with its own ‘Move’ programming language as well as get businesses on-board to accept Libra for payment. It will also give discounts or rewards to customers.

The company has also created a subsidiary called Calibra, which will offer digital wallets to save, send and spend Libras. Calibra will be connected to Facebook’s messaging platforms Messenger and WhatsApp, which already has more than a billion users.

Current partners in this new project include Mastercard, PayPal, PayU, Stripe, Visa, Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber, Iliad, Vodafone Group, Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited, Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures, Creative Destruction Lab, Kiva, Mercy Corps, and Women’s World Banking.

It is planning to have 100 members by Libra’s launch during the first half of 2020. Also, Facebook does not plan to maintain a leadership role after 2019. The Libra Association plans to raise money through a private placement in the coming months.