Facebook is planning to unveil an ambitious plan to create a new digital currency and financial system to revolutionize the way money moves around the world, and not just on its own apps.
It’s leading a consortium to create “Libra”, an open-source digital currency, set to launch in the first half of next year. The aim is to create services for consumers to send money around the world easily for free as conveniently as sending a photo or a message.
The Libra currency will not be run by Facebook, but instead by a nonprofit association supported by a range of organizations and companies. But Facebook plans to profit from it with Calibra, a new subsidiary, which is building a digital wallet of the same name for exchanging and storing the currency.
The company said that the financial information from a person’s digital wallet will not be used for ad targeting on Facebook’s platforms as the two divisions will be kept totally separate.
David Marcus, the leader of Facebook’s Calibra division said, “We’ve seen the internet change the game for everything that could be digitized, except for money.”
“The numbers really speak for themselves. There are 1.7 billion people around the world that are unbanked, the same number are underserved by financial services,” said Marcus, who ran Facebook’s Messenger division and was previously the president of PayPal, before taking over its blockchain initiatives. “Now, anyone with a cheap smartphone has access to all the info they want in the world for free with a basic data plan. Why doesn’t money work the same way?”
The announcement has come after Facebook faced a slew of privacy issues, raising many questions about whether people will trust the social platform with their financial information. Marcus says that this is why it’s so important that Facebook not be in control of the currency.
“It may sound super controversial but there’s no better way to demonstrate the evolution of our thinking, what we know we should control and what we should not and can not control. A network that enables billions of people to move money around the world should not be something we can or should control.” Marcus said.