After a social media platform, a messaging app and a photo app, Facebook is now looking to enter your wallet. Last week, Facebook announced that it is set to launch Libra, a new global currency, powered by blockchain technology, according to the company’s statement. Under Facebook subsidiary, Calibra, the social media giant will introduce a digital wallet for Libra. The wallet will be available on Messenger, Whatsapp and as a standalone app and is expected to be launched in 2020.
WHAT IS IT?
Calibra, a new digital wallet, will be used to save, send and spend Libra, the new currency. Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost, said the statement. There is likely to be a fee to use the cryptocurrency. The company plans to also provide additional services such as paying bills with the push of a button, buying a cup of coffee by scanning a code or riding local public transit without cash or a metro pass.
The company said it will not share account information or financial data with Facebook or any third party without customer consent. Customers’ account information and financial data will not be used for ad targeting.
According to Paypal, which is partnering with Facebook to launch Libra, this ecosystem will be enhanced by the new blockchain that is being built from the ground-up and Libra Reserve, a reserve of real assets that will back the Libra currency. This will provide enhanced stability, low inflation, wide global acceptance, and fungibility.
WILL YOU BE ABLE TO USE IT?
In the current scenario, India has not been in favour of using crypto currencies. It is unlikely that Facebook will be able to pass through the stringent regulations. “Libra, when implemented, will allow you to make crossborder payments more effectively than the existing remittance system and at a much cheaper cost. However, it will be difficult for the social media giant to comply with the AML (anti money laundering) and monetary control requirements. Libra is quite different from the major cryptocurrencies like Bitcoin and Ethereum. Libra is pegged to a basket of currencies and its value will not fluctuate much similar to existing cryptocurrencies. Hence, Libra cannot be considered as an investment instrument for retail investors," said Praveenkumar Vijayakumar, chief executive officer and founder, Belfrics Global.
Last year, multiple agencies including income tax department, enforcement directorate and regulators such as the RBI and the Securities and Exchange Board of India (Sebi) and the ministry of information technology scrutinised cryptocurrency companies. Facebook’s Whatsapp in February 2018 had launched unified payments interface in beta version which still hasn’t rolled out officially yet.
It will be a wait and watch approach for India.