Social media platform Facebook has just announced its plan to create its own currency called Libra.
Libra will open up the economy and allow a large number of people around the world to send money across borders without racking up significant fees, unlike Western Union and other international money-transfer facilities. The currency will also widen online commerce for people who don’t have bank accounts or credit cards. The currency hopes to help increase purchases from ads on social media sites. “This is about fostering more sales within an ad to get more business from advertisers to make ads more interesting on Facebook,” Gartner analyst Avivah Litan explained in a press release.
The cryptocurrency will be Bitcoin-like, however it will coincide with established currencies like the U.S. dollar, euro, yen and others. Each Libra purchase will be aided by a reserve fund with equal value to real-world currencies in order to stabilize its value.
— Financial Times (@FinancialTimes) June 18, 2019
Libra is not going to be run by Facebook directly. The company and its partners are going to form the Libra Association, which is a nonprofit that will oversee the currency and its usage, and will be headquartered in Geneva. Swiss financial authorities will be regulating the system. Along with Libra there will also be a subsidiary called Calibra, which will be an e-wallet that allows people to buy, sell, and use the currency.
Libra is estimated to be released within the next six to twelve months.