Facebook will launch a cryptocurrency in 2020, signalling a move beyond the social media and advertising markets it has dominated for the last decade. But Facebook, which continues to battle privacy and security scandals, insists financial and social data will be separated.
The cryptocurrency, called Libra, is a blockchain based payment system integrated via a digital wallet within Messenger and Whatsapp, and available as a standalone payment app. Facebook says it is creating a regulated subsidiary, called Calibra, to manage the new financial services across the Libra network.
This week Facebook announced several large corporate partners including financial giants Mastercard and Paypal that it said would help with the creation of a cryptocurrency. Overnight, it revealed details of the initiative in a company blog post.
Calibra’s namesake product is a digital wallet to store and spend the new global currency. Initially this will be used to send Libra to other users, requiring only a smartphone, at “low to no cost”, according to Facebook. But there are plans to expand the financial services to include bill payments, contactless payments, and public transport payment.
Facebook said the digital wallet and currency will help address global challenges of access to financial services, particularly in developing nations.
The company claims it will take new steps to protect user privacy and won’t be mixing data with its social platform to improve its advertising, how the company makes it billions in revenue.
“Aside from limited cases, Calibra will not share account information or financial data with Facebook or any third party without customer consent.
“This means Calibra customers’ account information and financial data will not be used to improve ad targeting on the Facebook family of products. The limited cases where this data may be shared reflect our need to keep people safe, comply with the law and provide basic functionality to the people who use Calibra. Calibra will use Facebook data to comply with the law, secure customers’ accounts, mitigate risk and prevent criminal activity. You can read more about our commitments to privacy and consumer protection here.”
Facebook says it is still early in the process of developing Calibra and will continue to consult with experts and stakeholders.