The world still reeling under the longstanding success of Bitcoin, Facebook has also announced the launch of its own cryptocurrency in 2020. Called Calibra, this announcement is certainly creating ripples in the market already. While Calibra is the name of the digital wallet, the cryptocurrency is called Libra named after the roman measurement of weight.
"global currency and financial infrastructure" as Facebook is calling it, the aim is to reach approximately 1.7 billion people around the world who are still unable to access the traditional mediums of managing and transferring money. To power this thoroughly planned digital asset, Facebook will be given a new blockchain version.
While there are many speculations regarding the authorship of the cryptocurrency and if Facebook is at all allowed to have its own cryptocurrency. There already have been many attempts to disband Facebook, however, there is no way that Facebook is laying low. Following the announcement, certain facts have come into the light:
- A collaborative association called the 'Libra Association' will be in charge of the cryptocurrency.
- The association is apparently a non-profit organization that will not only manage the transactions on Libra but also dispenses the funds to social causes.
- Following the launch, Facebook plans to draw out of the association and let the members have equal authority over the cryptocurrency.
- Once it launched, users can simply download the wallet app and use it on Facebook's apps Messenger and Whatsapp.
- It can also be used as a standalone app to transfer money across users.
- According to Facebook, "almost anybody" can download the app although the countries selected for launch have not been disclosed yet.
In a bid to make financial services available to everyone, Facebook insists that Calibra is developed solely to address the fact that, "Almost half of the adults in the world don't have an active bank account, and those numbers are worse in developing countries and even worse for women."
"The cost of that exclusion is high -- for example, approximately 70 percent of small businesses in developing countries lack access to credit, and $25 billion is lost by migrants every year through remittance fees.", Facebook added.
As per Facebook, the company plans to further enhance the use of the cryptocurrency by allowing users to actually use for day to day activities. Paying bills to shop with simple scan code, Facebook has put forth some extraordinary features it plans to introduce following the launch of the digital wallet next year.
Who can Buy Libra?
Amidst rumors, the most speculated question currently is who will be able to buy the digital currency? While the company has not clarified how it plans on making the currency available, sources suggest that it plans on following a hybrid approach. Users can buy the currency through traditional payment mediums like MasterCard and Visa. After a signup process on the Calibra wallet, users can also exchange currencies. In simple words, you can simply turn US dollars in your bank account into Libra currency online. This money can be used for transactions and payments later through the Calibra wallet.
Rumors also suggest that small amounts of currency may be handed out to users in a method wittingly called "air drop". This will not only jumpstart the system but also stand by its initial idea of bringing financial services to those without access to standard banking services.
How safe is Calibra?
Facebook is not new to allegations of having compromised the security of its users. No wonder doubts have arisen in minds of people regarding the security of information on Calibra. Facebook insists that the creation of the Libra association is solely for safety concerns. The association is currently comprised of 28 companies. These companies are in charge of monitoring and validating the transactions free of any interference from Facebook.
Though Facebook will have a say in decisions and modifications surrounding Libra, it will have equal power as other members of the collective.
To ensure more protection, Facebook says no data from Calibra will be used by Facebook. Exceptions will only be made in limited cases. For instances where users may lose their Calibra accounts, a live support facility will be put in charge so they can recover their accounts almost instantly.
In case of any fraud, a refund will also be given to users.
Speculations and rumors are not going to end anytime soon. However, what we are sure of is that this is a great plan by Facebook to keep reaching people to the farthest corners of the world. With the rise of cryptocurrency, this is certainly going to prove to be a fruitful plan for the company's expansion plan. As for the success of the venture, we will only have to wait for it to launch the coming year.
Jermaine Trotman is the co-founder of Nimble AppGenie, a company renowned for its bespoke mobile app development and web development in e-wallet app development and fintech development.