Over the last few years, cryptocurrencies have become an increasingly popular substitute for money as a way for people to pay for goods and services. Cryptocurrencies serve as money that can be used regardless of where you live – and as such have been heralded as opening the possibilities of a universal currency that can be used by anyone, anywhere. In 2019, Facebook waded into the realm of cryptocurrencies, announcing that it would soon be launching its own, known as Libra. What exactly will Facebook’s cryptocurrency involve, and how will the already controversial tech company handle moving into a fraught industry?
Why a cryptocurrency?
When Facebook first announced that it would be developing Libra, a lot of people wondered why exactly it would decide to enter the cryptocurrency market. While an obvious explanation might be that Facebook is simply looking to get its fingers in another pie, the company claims that its intention is to help those who would otherwise not have access to banking and cashless financial transactions. Although vast numbers of people nowadays have a bank account, Facebook claims that there are over 1.5 billion people across the world who don’t – and this is Libra’s primary audience. While a lot of these people do not have bank accounts, they do have internet access or a smartphone, and that’s where Libra comes in. Libra would give people the chance to carry out financial transactions online, using their phones, without needing a bank account. As such, it would widen the scope of transactions that people without bank accounts could carry out.
In an ideal situation for Libra, even people with bank accounts would eventually make a move to the cryptocurrency, boosting its status as a contender for the one universal currency. With the reach that Facebook has as the world’s largest social media platform, Libra could be in a position to truly change the face of financial transactions forever.
Who runs Libra?
Facebook has come under fire in recent years for a lack of oversight and accountability on the platform – which isn’t the greatest start to launching a new currency. After all, if there’s one thing you want to be regulated within an inch of its life, it’s the money that you use to pay your way through life. Well, Facebook claims that the new cryptocurrency will be overseen by an independent organization called The Libra Association – which will manage Libra and make decisions regarding the way it’s deployed. The organization is made up of several founding companies – including eBay, Spotify, and Uber – each of which will be part of the Libra Association Council, and oversee the operations of Libra.
What can Libra buy?
Enough about what’s behind Libra, the most important question is will you actually be able to buy anything with it? Well, that all depends on which services agree to take Libra as a currency. For instance, Lyft and Uber have both suggested that people might be able to pay for the ride-share services with Libra when it launches. In addition, people are currently able to attach their cards to Facebook and use this to send their friends money and pay for certain services – and although Facebook has said that it will step away from running the currency when it launches, it would make sense for the social media giant to adopt it as a payment method. With the world’s largest social media platform behind it, the possibilities for Libra – although not well-defined yet – could be vast.