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Facebook unveils Libra, a cryptocurrency in rivalry with Bitcoin



Facebook
Inc.

has officially announced its intention to launch a cryptocurrency called Libra, promising a secure payment system based on a blockchain, based on hardware resources and designed for mainstream users.

The Wall Street Journal reported in May that the initiative involved the creation of a "stablecoin", a digital asset backed by a basket of world currencies or other investments.

Facebook is creating a regulated subsidiary called Calibra to ensure "the separation of social and financial data". Calibra will deploy a crypto wallet, a digital wallet that can be used to pay for items online and send money, using Libra.

Facebook said the service would be available by 2020 on its Messenger, WhatsApp and as a standalone application.

The company has been working for more than a year on a blockchain-based payment system, under the leadership of PayPal's former president, David Marcus. Given the 2.4 billion active users of Facebook, this initiative is one of the most common attempts to deploy digital currencies and has helped push up the price of bitcoin in recent weeks.

Facebook said Tuesday that the network on which the new cryptocurrency was based would be governed by the Libra Association, an independent non-profit organization based in Geneva. Facebook has appointed more than two dozen founding associates of this association, including Uber, Visa Inc. and a handful of venture capital companies and blockchain companies like Coinbase.

Last week, the newspaper announced that Facebook would manage Libra through a consortium comprising Uber and more than a dozen other companies. All agreed to spend $ 10 million on the project and to help preserve the archives behind cryptocurrency.

The analyst of the Royal Bank of Canada, Mark Mahaney, said last week that he believed that the Cypto-currency would be "one of the most important initiatives in the history of the company to unlock new sources of commitment and revenue ". provide basic financial services in developing markets and facilitate micro-payments in the United States, possibly in connection with mobile gaming.

Facebook said that Libra could be used to carry out daily financial transactions such as paying bills, making retail purchases and paying for public transportation.

The social media company's project for a decentralized network, with many large partners, could give it coverage with users and regulators in case of problems. The final decision-making authority will belong to the Libra consortium.

The existence of Facebook's new subsidiary, Calibra, could help the company separate the personal data held by the social media site and the financial data necessary for the proper functioning of the encrypted wallet.

Facebook said the subsidiary would be regulated, but did not specify where and by which global agency.

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Regulators in the United States and elsewhere should be very careful. Some members of the consortium fear that the token will be used to launder money and fund terrorist organizations, a persistent problem of bitcoin and other encrypted currencies.

Facebook has already tried to make users believe that they make payments via the platform. Previously, Facebook suggested more speculative uses to potential partners, including the use of tokens to compensate users or content providers on the platform.

The deployment of the Balance by Facebook will be limited at the beginning. In a document published Tuesday for developers, he said that the cryptocurrency is still "in the prototype stage." The network hopes that, from its initial launch, its network will be able to support only 1,000 payment transactions per second. In comparison, Visa's network can process more than 24,000 transactions per second.

Alibaba Group Holding
Ltd.

Alipay said it has processed more than 250,000 payment transactions per second on a busy day in 2017. Facebook said it hoped to increase the number of people who could use the system.


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