The US social media group Facebook announced Tuesday its intention to help launch a digital currency in 2020, which is one of the company’s most aggressive initiatives to go beyond digital advertising.
A new non-profit group based in Geneva, the Libra Association, will oversee the currency, called “Libra”. It will initially rely on the expertise of Facebook but will be governed by 28 founding partners, including Visa and Mastercard payment companies and Internet groups eBay, Spotify and Uber.
Facebook said it wants the currency to be available from the first half of next year and that many of the 2 billion people already benefiting from its services will regularly use this new currency to buy items or send money abroad.
“The motivation for this is to effectively enable a single global currency and a financial infrastructure that empowers billions of people,” said Dante Disparte, policy and communications manager of the Libra Association, quoted by NBC News.
The project would provide smartphones around the world with a user-friendly version of digital currencies, giving users a way to easily transfer money, increase credit and pay bills while avoiding high fees. Libra is Open Source, which means that any business or person can set up a business within its framework.
For example, a consumer could buy Libra in dollars and save it in a digital wallet. This Libra could then be sent to a family member via WhatsApp Messenger or used to pay a bill in a foreign country without having to worry about the exchange rate.
The project represents the largest initiative of a major technology company in digital currency and blockchain. It represents a vote of confidence that experiences in new forms of digital payment could be more than a passing fad.
Libra, named partly after a Roman unit for weight and money, will have echoes of bitcoin, the popular cryptocurrency, but also some essential differences – notably the fact that it will be governed by a central authority and that its value will be linked to other assets.
Facebook said it would separate people’s financial transaction data from social media data so Libra’s information would not be used to target advertising on Facebook or Instagram.
And the value of Libra will be tied to a pool of real assets with low volatility, which will make it relatively stable compared to the notoriously fluctuating value of bitcoin, according to Facebook and the Libra Association. The reserve, or “basket”, will have assets “such as bank deposits and government securities in stable and reputable central bank currencies,” said Facebook.
The price of bitcoin has climbed above $ 9,000 in recent days, its highest level in more than a year, as information on Facebook projects increased expectations for digital currencies.