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What the New Facebook Cryptocurrency Means

Company announces Libra, which will be out next year
By John Johnson,  Newser Staff
Posted Jun 18, 2019 10:35 AM CDT
Facebook is coming out with a cryptocurrency called Libra, but lots of other companies will help run it.   (AP Photo/Marcio Jose Sanchez, File)

(Newser) – After a year of secret planning, Facebook announced Tuesday that it's getting into the cryptocurrency business. The new cryptocurrency, called Libra, is expected to be available in 2020, and Facebook has lined up more than two dozen big-name backers so far, reports TechCrunch. Many details are still to be ironed out, but you can almost think of it as a mainstream bitcoin. When people acquire Libra, they'd be able to use it to to make purchases across the internet outside of the normal banking channels and thus without the usual fees. But a key difference is that Libra will be linked to world currencies to help it avoid the wild swings that have plagued bitcoin and other crypto offerings. And it will be run by a Swiss nonprofit entity, not by Facebook itself. Details:

  • How it works: Users will buy Libra though "digital wallets." A big one will be set up by Facebook itself and called Calibra, though others will be able to set up their own platforms. Calibra, though, will have an advantage by making it easy for Facebook's user base of more than 2 billion people to get going. See this New York Times primer.
  • Example: Among the original partners are Uber and Spotify. They could start accepting Libra as payment, expanding their customer base to what TechCrunch refers to as the "unbanked." The full list of the original "founding members" of Libra, including Visa, Mastercard, eBay, and PayPal, is here.

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