By David Ndirangu
Facebook has decided to build a new payments and currency system called Libra, using blockchain technology.
According to the organization, the currency aims to bring together the attributes of the world’s best currencies i.e. stability, low inflation, wide global acceptance and fungibility.
It’s doing this in partnership with other global corporations, including VISA, Uber, Paypal and Spotify. The company said that it is starting a subsidiary – Calibra, which will provide financial services to businesses and individuals. These services include sending money, saving and spending. The currency will have a central bank called the Libra Reserve. A non-profit in Switzerland called the Libra Association will manage the currency.
Unlike other cryptocurrencies like Bitcoin, Libra will be backed by reserves and pegged to a basket of major currencies, therefore will be more stable. The currency is also said to be user friendly and will be able to handle large transaction volumes. The company plans to embed the currency into both the Facebook and WhatsApp applications.
Facebook has recently been criticized and investigated for privacy abuses and evasion, and it will be interesting to see how users and regulators will respond to this move.