On Tuesday, Facebook and its partners unveiled its new cryptocurrency dubbed Libra coin that will transform how its over 2.38 billion users perceive the use of crypto to make purchases.
Libra to Bring “Unbanked” Individuals to the System
The project is offering a stable digital currency that expects to bring more unbanked individuals into the system. The Libra coin will be backed by stable financial assets and managed through a governing body. The coin is expected to make an entrance into the market in the first half of next year.
The Facebook coin could potentially change the global banking system, and although it is seen as a game changer, it will nonetheless face scrutiny because the social media giant is reeling in a series of privacy scandals. The coin comes at a time when Facebook’s growth is slowing, and thus, the Libra coin holds a huge potential of being a money-maker for the company.
The move by Facebook is seen as a way the social media giant wants to make a mark in the daily lives of users. If the company succeeds to convince more users to start using Libra, it could potentially draw new users who will spend more time online, thus generating more revenue outside of advertising (advertising currently makes up close to 99% of Facebook’s sales, which were $15 billion in Q1 2019).
Facebook is doubling down on its private spaces, and it plans to make it easier for users to send messages without switching between WhatsApp, Messenger, and Instagram. Its digital wallet Calibra will be incorporated into WhatsApp and Messenger for storage of Libra.
Facebook has to Contend with Privacy Issues
However, Facebook faces a challenge as it is dealing with many issues following a number of privacy scandals. The company has alarmed lawmakers with its use of the data that it collects from its users for advertisement targeting.
Shortly after the launch of Libra, US lawmakers quickly raised privacy concerns about the coin, but Facebook has indicated that Calibra data will be kept differently than current Facebook data.