Libra: Facebook Plans Its Own Currency For 2 Billion-Plus Users

Facebook already rules daily communication for more than 2 billion people around the world.

Now it wants its own currency, too. The social network unveiled an ambitious plan to create a new digital currency similar to Bitcoin for global use, one that could drive more e-commerce on its services and boost ads on its platforms.

But the effort, which Facebook is launching with partners including PayPal, Uber, Spotify, Visa and Mastercard, could also complicate matters for the beleaguered social network. Facebook is currently under federal investigation over its privacy practices, and along with other technology giants also faces a new antitrust probe in Congress.

Creating its own globe-spanning currency — one that could conceivably threaten banks, national currencies and the privacy of users — isn’t likely to dampen regulators’ interest in Facebook. “It’s a bold and strategic move that has clear risks as well as opportunities tied to it,” said Wedbush Securities analyst Dan Ives. “This could raise further yellow flags as more regulators focus on Facebook.”

David Marcus, the head of Facebook’s cryptocurrency operation, said in a tweet that Facebook is creating a separate subsidiary, Calibra, to handle the new currency. He said feedback from customers has been “loud and clear” about keeping social media and financial data separate.

“We understand we will have to earn your trust,” he wrote.

The digital currency, called Libra, is scheduled to launch in the next six to 12 months. Facebook is taking the lead on building Libra and its underlying technology; its more than two dozen partners will help fund, build and govern the system. Facebook hopes to raise as much as $1 billion from existing and future partners to support the effort.