Facebook is planning to introduce cryptocurrency “Libra” into the market. The company expects to launch this cryptocurrency in the first half of next year. A cryptocurrency is a virtual currency that doesn’t exist in the form of bills or coins. The new currency will be a cryptocurrency just like “Bitcoin”, that has jolted the world with the sudden rallies and uncertain fluctuations in the price. This unregulated currency was highly criticized across the globe, specifically by the governments and banks. Cryptocurrencies can be exchanged digitally between buyers and sellers using a secret code for security without any involvement of government and regulatory bodies. Major economies of the world have abstained themselves from this sort of virtual currencies that don’t have any control from the regulatory authorities.
However, Facebook is likely to regulate this currency which is expected to revolutionize the financial services. In the official briefings, the company hints about regulations over ‘Libra’, the cryptocurrency. Facebook officials says that this digital currency will differ in several ways from Bitcoin, Ethereum and other popular cryptocurrencies of the world. Libra’s value will be tied to real money backed by banks and government securities in major currencies like the US dollar, Euro, Yen and other currencies. The Libra system will also be supported by several traditional financial companies such as PayPal, Visa, Mastercard and eBay. In order to support the Libra currency, Facebook created a separate company, called ‘Calibra’, to operate the Calibra wallet system. This wallet will be used to store, send and receive Libras. For easy operations, Calibra will be available as an app on smartphones or it can be directly used from facebook’s Messenger and WhatsApp products.
Moreover, the ‘Blockchain technology’ will be used for this cryptocurrency in which a network of computer, records cryptocurrency activity between users. A “ledger,” or list, known as the blockchain permits the activity records to be checked and stored securely for every transaction. A cryptocurrency user keeps its cryptocurrency in digital wallets that operate in a way similar to online banks. However, report says that Libra will be available to anyone with a smartphone and internet connection. According to “Facebook” the transactions will be smoother and much faster; and moving of money from around the world will become easy and cheap as sending a text message. The company looks keen to cater opportunity of 1.7 billion “unbanked” population across the globe. For instance, African countries such as Nigeria, Kenya and Namibia have the highest unbanked population that lacks banking services. Additionally, according to Facebook the costs associated with the use of Libra will be lower than that of the companies currently charge for the service. Experts believe this strategy will benefit Facebook in the long run.
