Facebook's New Money

The social media giant takes on the finance industry with Libra

Facebook’s currency, Libra, is nearing launch, and if the plans bear fruit, it’s going to be the most disruptive thing to come out of Silicon Valley for years.

Let’s start with what Libra isn’t. It’s not a cryptocurrency, you won’t be able to mine coins, and it’s not an opportunity for speculation or investment. It does use similar blockchain tech to drive it (see box, p60), but it’s a closed system designed for stability. It’s also designed to be fast, something Bitcoin struggles with (it can barely manage seven transactions a second; Libra will start at 1,000). It isn’t a bank account either, something Facebook is keen to stress for legal reasons, so you won’t be earning interest on your account, or get credit.

Libra is a stable private blockchain digital currency, and will be accessible through Facebook applications. It is not unlike a PayPal account in operation, but without a link to your bank account. Facebook has developed a subsidiary, Calibra, to handle it. You will be able to store Libra ‘coins’ (or whatever units of Libra are called; it’s not clear yet) on the Calibra wallet application, which links into WhatsApp and Messenger. Libra will also be available through Google Play. Once an account is verified using a government-issued ID, you will be able to spend hard cash to buy Libra, either electronically or by handing over actual folding stuff at the planned participating outlets. Facebook is in talks with chains of convenience stores to make cashing in and out readily accessible.