Facebook Targets Bitcoin with New Cryptocurrency

"If the top-line question about Facebook and antitrust is about whether to break it up and spin off the likes of WhatsApp and Instagram - well this global coin is the most invasive and unsafe form of surveillance they have devised thus far", Chen continued.

In addition to having its own standalone app, Libra would also be available through Facebook Messenger and WhatsApp, which is owned by Facebook.

Social media platform Facebook has unveiled further details of its much-anticipated digital currency offering, which it hopes will transform financial services.

But Libra has a few advantages over Bitcoin, which has proven to be a volatile currency.

An eponymous nonprofit association based in Geneva will oversee the blockchain-based Libra, maintaining a real-world asset reserve to keep its value stable. Libra is backed by governmental currencies like the U.S. Dollar and the Euro, so it should suffer from the wild value fluctuations that Bitcoin has experienced.

Facebook has also said that account holders will face the same know your customer requirements as with mainstream banking accounts and that it will deploy computer programs and algorithms to detect any suspicious transactions.

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Citi, in a report published June 17, wrote that Libra could represent "a meaningful new product and profit stream" over the coming years, calling it a path "to printing even more money". And backing all this is The Libra Association, which Facebook says will be an independent, not-for-profit organisation. The association will be regulated by Swiss financial authorities, Facebook said.

Nonetheless, Facebook promises not to "share account information or financial data with Facebook, Inc. or any third party without customer consent". And for now Calibra's just building a wallet to handle those transactions. Instagram messages won't be included, at least at first. That could range from Uber discounts to a Libra bonus paid when users set up a Calibra wallet, although the companies haven't laid out specifics.

There is no guarantee, however, this arrangement will remain unchanged - Facebook's privacy policy has changed often over the years. Libra is a stablecoin created to tame the volatility of cryptocurrencies and thus be useful for day-to-day commerce. The currency's name: Libra.

"This transaction instrument will allow Facebook to again accumulate millions of millions of items of data", Le Maire said. Zuckerberg's vision - which has mostly not been detailed publicly - will rely heavily on privacy-shielded messaging apps in an attempt to make the services more about private, one-to-one connections.

Reacting to the news, the French Minister of the Economy stated that they will "ask Facebook for some guarantees", ensuring that the corporate cryptocurrency doesn't step on the turf of governments by acting as a rival to sovereign currencies.

  • Darren Santiago