In case you hadn’t heard, Facebook’s working on a cryptocurrency. There have been plenty of rumours floating around on the secretive project, codenamed Libra, for a while now, but this week we saw the floodgates open with reports of a likely official launch on June 18.
So, what do we know so far?
A few weeks ago, the BBC reported that the cryptocurrency would be called GlobalCoin, but now it seems that won’t pan out. Reuters has reported Facebook has registered a company called Libra Networks in Switzerland, meaning there’s a decent chance the social networking giant will stick with Libra.
But while the BBC might have gotten the name wrong, it does seem to be on the mark that the new cryptocurrency will be what’s called a stablecoin. Compared to the volatility you might expect from ‘regular’ cryptocurrencies, stablecoins are pegged to actual currencies like the U.S. dollar to protect against price fluctuations. According to TechCrunch, Facebook’s looking to stabilise its cryptocurrency against multiple international currencies – not just the dollar – as well as low-risk securities.
As for how one might use Facebook’s cryptocurrency, TechCrunch says users who send money via Messenger or WhatsApp, also owned by Facebook, will incur zero fees. Meanwhile, the Information reports you’ll also be able to use ATMs when exchanging traditional money for crypto.
That makes sense since initial reports indicated Facebook’s target with crypto is international remittances and users without bank accounts. Back in late 2018, Bloomberg reported Project Libra was intended to work with WhatsApp, which is popular in emerging economies like India – which also leads the world in remittances.
With regard to its cryptocurrency, Facebook also seems to be aware of its less than stellar public reputation. It’s in talks to create an independent oversight foundation, according to the Information. It’s also reportedly offering third-party organisations to help manage the cryptocurrency, provided they cough up $10 million (£7.8 million) for the honour of running a node. This will theoretically decentralise Facebook’s power over the Facebook Bucks and is expected to net the social media giant up to $1 billion (£784.9 million) in swift fashion.
Cynically, you could see the decentralisation of governance as Facebook’s attempt to avoid regulation – though, multiple reports say Facebook has been in close contact with various banking regulators, including the U.S. Treasury, Western Union and the Bank of England. Driving that point home, the U.S. Senate and Banking committee issued an open letter to Facebook CEO Mark Zuckerberg questioning how the company planned to implement the cryptocurrency, and what sort of consumer protections it planned to put in place.
To top it all off, Facebook employees working on the cryptocurrency can also opt to give up traditional cash money forever. To prove how much they love Father Zuck, the Information also reports that they will get the option to instead be paid in Facebook’s cryptocurrency. Hell yeah, it’s the company town dream reborn for the digital age.
Of course, this info is all subject to change but all signs are pointing to a big reveal coming very soon. Until then, you’ll just have to pay for things with government-issued currency, a tried and true system that gets the job done. [The Information, TechCrunch]
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