A digital currency called Libra has been unveiled by Facebook, confirming a number of previous posts.
The new currency will have a main governing body, the non-profit Libra Association, and will be supported by a number of financial institutions, the official debut is expected to take place in the first half of 2020. According to analysts, the largest social networking site has already allowed users to transfer money, buy products from online stores, or sell their own items through its online platform. In fact, with Libra, Facebook is even more encouraging.
What is essentially Libra is another example of social media’s efforts to become an integral part of users’ daily lives. If the public is convinced of the usefulness of Libra, then Facebook could attract new users, keep them online for a longer period of time, resulting in increased advertising revenue. It is noted that 99% of Facebook’s $ 15 billion in revenue in the first quarter of 2019 comes from advertising.
It is noted that Facebook’s move comes at a time when the company is preparing wider changes to its online products, more specifically it will gradually become possible for users to send messages without the need for switching between different platforms: Messenger, WhatsApp, and Instagram. In the same vein, the Calibra digital wallet, created to store Libra digital currencies. Calibra will be essentially integrated into Messenger and WhatsApp in the first place, while something similar may happen later for Instagram.
In the midst of all this, Facebook will have to overcome the problems that a series of security “scandals” have created for it by leaking users’ personal data. According to the company, Calibra’s data will be kept separate from users’ social networking data. Also, another difficulty that needs to be overcome is how easily and quickly Libra will be accepted. The use of cryptocurrencies in day-to-day transactions is not uncommon.
However, this is not the first time that a technology company has entered the field of cryptocurrencies. A typical example is a LINE, a Japanese messaging app that launched a similar digital currency called LINK about a year ago. Also, the Chinese WeChat messaging app allows its users to connect their credit cards to the app and make electronic payments and money transfers, but not cryptocurrency transactions.
Market analysts believe that the size and transparency of Facebook will be a significant advantage in the effort of the American company. Characteristics are the argument that 2.7 billion people use Facebook, Instagram, WhatsApp, or Messenger applications.
To ensure user safety, Facebook will ask users to verify their identity by “uploading” some sort of identification, such as a driver’s license in the United States. The company will then encrypt that information, depending on the regulations in place by local regulators. This is followed by the connection of the bank accounts in the application, with the digital wallet undertaking the automatic conversion of the regular currency (eg dollar) into Libra.
Source: Tanea
