Facebook has officially announced its own cryptocurrency is due to launch next year, in a move that could potentially be “truly transformative” for the global finance sector.
The social media giant today revealed its own digital currency Libra, which it plans to make available to its 2.4 billion monthly users in the first half of 2020.
Unlike cryptocurrency rivals like Bitcoin, Libra will be backed by real money, which it is raising by reaching out to high profile tech and financial backers.
So far 28 high profile companies including Mastercard, Visa, Vodaphone, Paypal, Ebay, Spotify and Uber have signed up to be founding members of the Libra Association, requiring each of them to invest a minimum of $10 million (£8 million).
The Libra Association will be a not-for-profit membership organisation, which Facebook wants to attract 100 members to sign up to before its launch in 2020, and will effectively run the currency.
By using backing up the digital currency with real reserves, Facebook hopes to quell the volatility which has become a defining feature of cryptocurrency.
Its ultimate goal is to provide financial services to the 1.7 billion people across the globe without access to bank accounts, allowing all its users the ability to send money around the world for free and with the same convenience as sending a photo or message.
Facebook also plans to open a new subsidiary called Calibra, which will build a digital wallet for storing and exchanging the currency, but this will be completely separate from Facebook meaning personal data is not shares between the two companies.
“We’ve seen internet change the game for everything that could be digitized, except for money,” the head of Facebook’s Calibra division David Marcus said.
“The numbers really speak for themselves. There’s 1.7 billion people around the world that are unbanked, the same number are underserved by financial services. Now, anyone with a cheap smartphone has access to all the info they want in the world for free with a basic data plan. Why doesn’t money work the same way?
Libra’s blockchain will be open-source, meaning that anyone will be able to build apps or services which can use and integrate the currency.
Calibra will be accessible either as a standalone app, or integrated through Messenger and WhatsApp, allowing anyone to securely store money for free on their phone and transfer money around the world for free.