The Catch-up: Why on Earth has Facebook launched its own currency?

What happened?

Facebook has confirmed it will launch its own cryptocurrency known as Libra next year. The currency will allow users to send money to each other and make payments from their smartphones. 28 firms so far, including Mastercard, Visa and Paypal, have invested a minimum of $10 million to back it. Facebook says it will have 'no special role' in governing. Facebook will operate its own digital wallet for people to spend Libra, known as the Calibra Wallet, which will be available in WhatsApp, Facebook Messenger and as a standalone app.

Why is it a big deal?

The launch is already attracting intense scrutiny, particularly amid increasing calls for strengthened regulations over privacy for social media giants like Facebook. The network claims it is launching Libra so the 1.7 billion people across the world without access to a bank account can make transactions more easily. However it is not clear how it will service this market more effectively than existing non-cryptocurrency products such as TransferWise and WorldRemit already offering non-banked payments.

Critics say Libra is all about making money at a time that Facebook's profits are stalling. David Gerard, the author of ‘Attack of the 50-foot blockchain’, said in a newsletter earlier this week: “It will be spun as banking the unbanked, revolutionising payments and connecting the world, but don't be fooled, this move into the murky world of cryptocurrency is about tapping new wells of data, the modern-day oil."

Read more:

Facebook hasn't told us: why launch a cryptocurrency? (Yahoo Finance UK)

What is Facebook’s new currency and how do I use it? (The Independent)

‘Facebook's Libra launch will extend its global domination’(The Guardian)

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