Cryptocurrency News: What Is Libra, Facebook's Latest Venture?

Facebook, Inc. (FB) on Tuesday announced its new cryptocurrency project Libra, while a digital wallet, Calibra, will be used to store the currency.

The goal of the currency is to be able to easily pay for goods and services anywhere in the world by smartphone and avoid issues such as exchange rates.

“Our hope is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have,” Facebook blockchain chief David Marcus posted on Twitter.

The service hopes to assist the approximately 1.7 people globally without bank accounts to engage in financial transactions.

The currency will be governed by an independent association called the Libra Association and it will be backed by real currency and assets. The currency will also be built on open-source blockchain technology.

Facebook announced that other investors such as Spotify and eBay will take part in the project.

Democratic presidential candidate Andrew Yang, who has sought alternative ways to improve economic conditions for poorer Americans, praised the move.

“The new Facebook-backed cryptocurrency Libra could be a big step for the hundreds of millions of unbanked around the world. Its use of the blockchain makes a lot of sense. Could even curb corruption as a lot of int’l aid money intended for impoverished people never reaches them,” Yang posted on Twitter.

There may be concerns about the trust in Facebook and cryptocurrency. Over the past few years, Facebook has been involved in numerous scandals surrounding privacy. Marcus stated that "to earn people's trust, we are going to have to make strong commitment on privacy."

The New York Times reported in December that Facebook gave access to user data to companies such as Microsoft and Spotify.

News broke in March 2018 that data analytics and political consulting firm Cambridge Analytica bought user data on millions of Americans from Facebook without their knowledge, leading to CEO Mark Zuckerberg testifying in front of Congress.