When Facebook jumped into the cryptocurrency market, CEO Mark Zuckerberg sidestepped privacy concerns by creating a separate service to handle customer transactions.
Known as Calibra, the new digital wallet will allow customers to send and receive the Libra cryptocurrency on Facebook Messenger and WhatsApp without Facebook accessing their data.
The company is betting Libra will appeal to the average consumer in ways cryptocurrencies such as Bitcoin haven’t, since platforms that can use it are already available to billions of users. To avoid unpredictable value fluctuations and fraud, Libra will be backed by reserves of established currencies, such as the U.S. dollar, the euro, and the yen, and overseen by a new non-profit, the Libra Association, that will employ Swiss financial officials in Geneva.
While Facebook is the principal investor in the endeavor, the company is partnering with PayPal, Uber, Spotify, Visa, and Mastercard to help fund and govern the currency, slated for launch in 2020.
Libra users will be able to send money across national borders without fees, and may appeal to users in developing countries that lack the payment options available in the United States.
“If you fast forward a number of years, consumers all over the world will have the ability to access the world economy,” Facebook executive David Marcus told the Associated Press.
Given criticism over Facebook’s privacy practices, company officials are reassuring customers that transaction data collected by Calibra will not be shared with the Menlo Park, Calif.-based parent company. In addition to grappling with complaints over the past three years for breaches that let violators access data from millions of customer accounts, Facebook is among a group of Silicon Valley giants facing antitrust scrutiny from Congress.
“Unwarranted, concentrated economic power in the hands of a few is dangerous to democracy,” House Speaker Nancy Pelosi tweeted June 3 in regard to digital platforms.
According to Fox News, more than 60% of voters share the same sentiment and say Facebook has accrued too much power.
