A brand new crypto currency called Libra is being established by Facebook and 27 other companies, including MasterCard, PayPal, eBay, Vodafone and Uber. It will allow users to make payments, instantly, anywhere in the world.
What makes it different from other high-profile cryptos is that it will have a stable value, owing to it being backed by numerous international currencies such as the US dollar, the Euro and Yen.
Director of G Squared Digital Marketing George Photios says Facebook has a history of releasing products which are an outrageous success, and with more than 2.1 billion people using Facebook, Instagram, WhatsApp or Messenger every day, they’ve got the user base to get it into a lot of people’s hands very quickly.
“Banks in Australia have tried to centralise payments and make them quick, instant and easy,” he said. “But even Pay ID is clunky and unreliable. With Libra, set up will likely be incredibly simple and the user interface familiar to anyone using any of Facebook’s other products or services.”
Facebook will gain a lot of power with the release of the Calibra app (basically the Libra wallet), with the idea being that it will be used as a currency not just within Facebook but in the physical economy too.
There will of course be concerns around privacy and how data is used and stored. With so many massive companies behind Libra, does that mean spending behaviour data will automatically be shared across all of them?
“Some people are more protective over their data than others, said Photios. “For the more cynical I’d say this would be a massive red flag, but for those who don’t really mind how it’s being used now, I can’t see a huge difference.”
Facebook already analyses our spending habits across most of the world’s ecommerce websites, does the addition of physical spend really change much?
Digital media and marketing expert Teresa Truda says Facebook is entering this space to mainstream the use of crypto currency.
The main difference between Bitcoin and Libra is that Bitcoin is far more volatile, is not backed by international currencies, and is not regulated. Facebook has also announced that Libra is not decentralised, with trust in the Libra Association serving as a central bank.
“Bitcoin is where crypto currency started in 2009,” says Truda. “Bitcoin is used in market to trade but Libra would be used be exchange for services, products or use it in your everyday life.”