Facebook has recently announced the official launch and timeline for the roll-out of its much-hyped ‘Libra’ digital currency – an online payment platform that is accessible via social media. Although the project will only begin operating fully next year, enthusiasts can already sign-up now to receive notifications of upcoming developments.
Registration for the service is available via the website of the newly-formed Facebook subsidiary company Calibra, which will oversee the development of the new project.
A real cryptocurrency?
There has been much discussion amongst the cryptocurrency community regarding Libra coin, with many suggesting the project could present a considerable boost for the digital assets industry. Others, however, have less than positive feelings toward the new coin, claiming it isn’t a real cryptocurrency and could negatively affect the overall market. Cryptocurrency traditionalists tend to believe that any digital asset created and controlled by a corporation goes against the original goals of open-source, cryptographic digital cash that Satoshi Nakamoto envisioned with the invention of Bitcoin.
In an interview with Decrypt Media, Facebook’s Vice President of Messaging Products, David Marcus, assured users that the company would not have complete control over consumer funds and there will be no “co-mingling” of financial and social data. However, many users remain skeptical and distrustful of Facebook following last year’s Cambridge Analytica data breach scandal, which may have compromised sensitive user information. This may be just one of the reasons why Facebook is distancing its official brand name from the project and rather launching it as a collaborative project that involves several retail and financial organizations, including Visa, Mastercard, Paypal, Uber, and eBay.
A threat to current crypto payment gateways?
Social media and messaging app-based payment platforms are not entirely new, with competing apps Zelle and Paypal’s Venmo settling a combined $110 billion in transactions in 2017 alone. However, until now, there has never been an organization with such a large user-base releasing a payment platform touted as a ‘cryptocurrency.’ Facebook has stated explicitly that one of the main goals of Libra is the provision of financial services to the millions of unbanked citizens of the world – something Bitcoin has long hoped to achieve. With more than two and a half billion users, what kind of threat does Libra pose to existing cryptocurrency payment gateways?
At present, one could assume that there is enough of a technical separation between Libra and traditional cryptocurrencies like Bitcoin to keep them distinct from one another. Libra acts as a digital payment platform that is essentially a government-regulated, corporate-backed stablecoin – whereas Bitcoin is an entirely ungoverned, private, peer-to-peer form of cash. However, the method by which Libra coin is being marketed is concerning, considering that it may be the first time that hundreds of millions of people receive exposure to the concept of cryptocurrency. For this reason, the term cryptocurrency is at threat of losing its original meaning and the subtle characteristics that make Bitcoin unique may be lost to those less technically-inclined.