Everything you need to know about Facebook’s cryptocurrency
After much rumour, Facebook has officially revealed details about its cryptocurrency, which it is aiming to launch next year, working with a number of key players in finance and beyond.
Here is everything you need to know about Libra and Calibra.
- What has Facebook announced?
Facebook has announced that it will launch a crytocurrency known as Libra, and a digital wallet that will use the currency, called Calibra.
The social network will not take sole control of Libra, instead governing it equally with a number of well-known companies, such as Mastercard, Visa, Uber and Spotify, as part of the Libra Association.
- What is Libra?
Libra is the name of the cryptocurrency, run by the Libra Association.
The ecosystem will be underpinned by the Libra Blockchain, which the organisation says has been "built from the ground up to prioritise scalability, security and reliability, as well as the flexibility required to evolve over time".
Libra is supported by a reserve of real assets and the world's most trusted central banks.
Early-stage code for the Libra Blockchain will also be open source, meaning anyone can choose to include the currency in their own payment app.
- What is blockchain?
Blockchain is a system which keeps a digital record of cryptocurrency transactions across a network of computers, creating a chain of information blocks.
It is decentralised, meaning no one organisation controls it and is a publicly accessible network.
Once a transaction is recorded on a blockchain, it cannot be changed.
- How does the Libra cryptocurrency work?
Facebook says that Libra is a "new form of blockchain that doesn't use mining" and instead uses "nodes", which are servers used to help operate the blockchain.
The nodes form a network on which developers and businesses can build financial services and products.
- Is Libra safe?
According to the Libra Association, it has worked with the financial sector, regulators and experts across a variety of industries to ensure that its system is secure.
They say each coin is fully backed with a set of stable and liquid assets, such as bank deposits and government securities in currencies from stable and reputable central banks, and that by working with a competitive group of exchanges and other liquidity providers, it can assure users that they will be able to sell any Libra coin at or close to the value of the reserve at any time.
- Who is backing Libra?
There are currently 28 founding members of the Libra Association, including Mastercard, PayPal, Visa, Vodafone, Spotify and Uber, as well as the owner of Booking.com and Facebook itself.
The Association aims to have 100 members on board by launch.
- What is Calibra?
Calibra Wallet is the name of Facebook's own payment app service, which will be integrated into Facebook Messenger and WhatsApp, as well as a standalone app.
Users will be able to send money to each other initially, at low to no cost, the social network said.
Eventually it intends to open the Calibra Wallet up to additional services, so that people can pay bills, buy goods by scanning a code or accessing public transport.
- When will it launch?
Libra and Calibra are planning to launch in the first half of 2020.
- How much will it cost to use?
Exact fees are not clear at present but Facebook says that sending money through Calibra will be "as easily and instantly as you might send a text message and at low to no cost".