But Libra will be much cheaper, and require no bank accounts: more Bitcoin than Venmo.Įxcept that, unlike Bitcoins and other cryptocurrencies, Libras will change hands in seconds, not minutes, for next to nothing, not a few dollars. Fintech firms like TransferWise, which offer international transfers, take a 4-5% cut to wire $200, a third less than Western Union. But these services do not cross borders, and require users to have a bank account. WhatsApp is testing a similar function in India. Messenger already offers payments to Americans. ![]() It can be done in Facebook’s Messenger app or WhatsApp, another messaging-service-cum-social-network it owns-and, later next year, in a stand-alone app. If the project lives up to the mock-ups, buying, selling, holding, sending and receiving Libras will become a doddle. So could the impact on Facebook’s business. ![]() The consequences for the global financial system could be significant (see article). In a tacit acknowledgment that its mishandling of user data, tolerance of the spread of misinformation and other sins have devalued its stock with policymakers, users and potential partners-though not investors-Facebook wants to outsource the running of Libra to a consortium of worthies recruited from the world of finance, technology and NGOs. It could also, if broadly adopted, vest unprecedented power in the hands of its issuer. If each of Facebook’s 2.4bn users converted a slice of their savings into Libras, it could become a widely circulated currency. Notwithstanding the guff, the commercial potential is indeed significant-as are the potential problems. Making money or strengthening its market power are, apparently, a sideshow. Unable to contain its appetite for Silicon Valley platitudes, Facebook claimed that its mission was to “empower billions of people”. Inevitably, Facebook dished out a generous helping of trendy words like crypto and blockchain. Within a year, the social network will launch a new currency to be known as Libra, in honour of an ancient Roman unit of mass-it is also the word for “pound” in many romance languages. That, in a nutshell, is what Facebook promised on June 18th.
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