Because we all want more Facebook in our lives... The social network just announced Libra, its own cryptocurrency. Like Bitcoin, Facebook's ZuckBucks run on the blockchain, not banking systems. And the digital wallet that holds Libra (its symbol is three exotic waves instead of "$" or "€") will be pre-installed in accounts of 2.4B Facebook users. If you can Venmo your roommate Laura $26 + emoji for brunch, you can send her Libra (starting in 2020).
"A new global currency on a new global network"... That's one of the (many) lofty claims from Facebook about what this could mean for the world.
- Cheap: According to FB, $25B is lost by migrants every year through fees paid on international transfers. Transferring on Libra will be "low to no cost."
- Shared responsibility: Facebook and 27 other "partners" (aka well known international corporations like Uber and Mastercard) will run a nonprofit that oversees this currency, so it's not all in Zuck's control (they each paid $10M to fund Libra and get one vote governing it).
- Stable: This "stablecoin" will be backed up by hard money, like the US dollar, South Korean won, or South African rand. So unlike Bitcoin, the value of Libra will be relatively stable.
- Awkward name: In horoscopes, Libras are balanced babies born Sept 23-Oct 23. In French, Libre means free. In Australia, Libra is a leading tampon brand.
This is targeting emerging markets... In the West, Facebook faces major distrust — Libra's combatting that with ID verification, fraud protection, and a promise not to use financial data to sell ads without users' consent. But even if Libra fails in the US, it could succeed in developing countries where there are more people, more trust for the 'Book, and huge needs for low-cost banking services.