Popular social networking platform Facebook is getting into the cryptocurrency space. The company announced its intentions to bring crypto to the mainstream with a new coin known as Libra.
According to a TechCrunch report on Tuesday (June 18), the new cryptocurrency Libra will be unveiled to help people pay for things or send money to other people with almost no fees involved. Facebook announced that Libra will be something that is usable with various third-party wallets. It will also include the Facebook Calibra wallet which is going to be part of the Facebook app, Messengers, and WhatsApp.
The way Facebook’s new crypto will work is by a consumer cashing in whatever local currency they have in exchange for Libra. From there, Libra will be spendable like dollars without extra transaction fees or a real name attached. The Libra holders can cash out Libra whenever they decide too. The Libra may also need to be accepted at the purchase point.
The Libra Association will govern the new cryptocurrency. That consists of not only Facebook but also other companies and investors. They include Uber, Visa, and Andreessen Horowitz. Each of these founding members put a $10 million investment into Libra’s operations and will get a vote in the crypto’s governance.
There could be many attractive reasons that people will use Libra for transactions. While the “almost zero fees” for transactions is one of them, another is privacy. Facebook’s subsidiary company Calibra will handle all the crypto transactions. That will help with people’s privacy as payments won’t be “mingling” with Facebook data. Therefore, people won’t be targeted on Facebook for ads based on what they used their Libra for.
The end plan for Facebook is to create the next version of PayPal with Libra. When they saw that cryptocurrency was sticking around and could be used by another company to have access to customer data, it posed a problem. Facebook has seven million advertisers and over 90 million small businesses, plus billions of users worldwide. That meant they needed to address the fact that crypto wasn’t going anywhere soon and Facebook should be in the mix to make transactions more convenient.
The starting value for the new cryptocurrency is still in progress. The goal is to make that value easy enough for people to conceptualize amounts or costs and use Libra conveniently. As far as the start date, that’s expected to arrive in 2020, so stay tuned.
The Facebook stock was on the rise with the latest Libra crypto news. As of this report, Facebook stock (FB) was up $2.34 or 1.24 percent to $191.35. It’s still off a 52-week high of $218.62, but well ahead of the 52-week low of $123.02.