AP/Facebook/Business Insider
- Facebook on Tuesday announced the launch of its forthcoming cryptocurrency, Libra, and subsidiary financial service, Calibra.
- The service isn’t launching until 2020, and there are still a few unanswered questions.
- Facebook hasn’t clarified how old you have to be to use Libra, whether it will integrate with Facebook’s existing Messenger payments, and how it got the name "Libra."
- Visit Business Insider’s homepage for more stories.
On Tuesday, Facebook announced the 2020 launch of a new cryptocurrency: Libra.
Facebook teamed up with a slew of multinational companies to launch the currency, which will by monitored by an independent non-profit called the Libra Association when it launches in 2020. Facebook also created a new subsidiary, an app called Calibra, that will let uses send and receive the currency.
Lawmakers have already expressed alarm over Libra: Bruno le Marie, France’s finance minister, rejected the potential for Libra to turn into its own "sovereign currency." And late Tuesday, Democratic congresswoman and House Financial Services Committee Chairwoman Maxine Waters called for Facebook to pause its plans until regulators can look into the new cryptocurrency.
With Libra still a year out from launch, there are plenty of major questions being raised about the new service. For instance, we don’t know yet how Facebook plans to comply with each country’s rules for governing financial transactions; we also don’t know if Facebook and its other Libra partners will offer any kind of protections for consumers.
Apart from some of the larger financial questions about Libra, here are six other things we’re still wondering about the new cryptocurrency:
How involved will Mark Zuckerberg and Facebook be in Libra?
Associated Press
The Libra Association will oversee Libra Blockchain and manage Libra’s reserve to assure the stability of the cyptocurrency’s value.
The organization is composed of founding companies of the cryptocurrency, each of which contributed about $10 million. According to the Financial Times, members include PayPal, Vodafone, Lyft, Uber, Mastercard, Visa, and Spotify — the association does not include Amazon, Google, Apple, or any banks.
The Libra Association is meant to be an independent non-profit, and Zuckerberg and Facebook won’t have any more voting power in the organization than any other company. However, Calibra’s "Customer Commitment" outlines the following:
"Facebook teams played a key role in the creation of the Libra Association and the Libra Blockchain, working with the other Founding Members. While final decision-making authority rests with the association, Facebook is expected to maintain a leadership role through 2019 … Once the Libra network launches, Facebook, and its affiliates, will have the same commitments, privileges, and financial obligations as any other Founding Member. As one member among many, Facebook’s role in governance of the association will be equal to that of its peers."
Facebook is similarly involved with Libra itself. Facebook may be excluding itself from Libra’s marketing — the Libra website doesn’t mention Facebook, and it has different branding than Facebook or its other subsidiaries — but its engineers are contributing significantly to the cryptocurrency’s open-source codebase.
How do we know Facebook won’t have access to information you share with Calibra?
Reuters
Facebook is emphasizing the security of Libra, which is built on a sort of blockchain, as well as Calibra’s status as a subsidiary, which should assure that it is regulated and that financial data is kept separate from Facebook.
Facebook’s press release specifies that, with the exception of "limited cases," Calibra "will not share account information or financial data with Facebook or any third party without customer consent." Examples of limited cases when data could be shared include suspected criminal activity or fraud.
Despite these attempts to reassure potential Libra users, privacy issues are still on folks’ minds, given privacy breeches at Facebook over the past two years, including the Cambridge Analytica scandal.
How will Libra roll out to grocers and convenience stores so people can convert real money into cryptocurrency?
Amy Sussman/AP Images for ALDI
We can expect to see real-world cash exchanges for Libra, beyond the Calibra digital wallet. This could look like going to a grocery store or convenience store and adding to your Libra balance there, like topping off a pay-as-you-go phone plan.
But, how exactly this exchange will go down, whether there will be any limits on cash exchanges, and what types of stores and chains specifically will be willing to partner with Libra, are yet to be announced.
See the rest of the story at Business Insider
See Also:
- Facebook’s facing a bunch of questions about its new cryptocurrency. How it addresses them will make or break the service.
- Astrologists and Libras are furious that Facebook named its new cryptocurrency after an astrological sign that promotes balance and fairness
- Facebook just unveiled its new Libra cryptocurrency — here’s how to sign up for early access
SEE ALSO: Facebook just unveiled its new Libra cryptocurrency — here’s how to sign up for early access
Source: Business Insider – raydin@businessinsider.com (Rebecca Aydin)