With all the cryptocurrencies and wallets coming in business, it was about time that the technology entrepreneur and social media king, Mark Zuckerberg entered the crypto world. And recently he made few announcements that left the whole world confused and happy(maybe?).
Mark hosted a conference where he decided to let the world know about his upcoming project with a Switzerland based not-to-profit organization know as Libra Association. He has finally decided to enter the cryptocurrency and wallet market with his new project, Facebook’s cryptocurrency-Libra.
Along with this, they are also planning to launch a digital wallet- Calibra that will work with their cryptocurrency Libra. But the whole world has reacted to this news with mixed reviews towards the announcement of the launch.
What is Libra? And is it worth it?
As discussed during the launch event, Mark explained that they have teamed up with Libra Association, an association formed by Facebook and its partners for this project. This will help them to manage the technical aspects of the project, and Libra also has some built-in safeguards to help keep the value of cryptocurrency stable.
Libra is considered as a platform for the people who are using Facebook as an easy way for them to send money, whether its a business deal or sending money to friends. Facebook aims to make this easier with Libra. Using the Calibra app, they want to reach out to the wider user base of over 1.7 billion users that Facebook has.
Libra and Calibra will work together to provide a platform to the people that they can use on Facebook or Whatsapp Messenger to send money to people. David Marcus, the head of the project for social media, took over to Facebook and has posted all the answers about these projects.
Libra is planning to target those countries that have a lot of Facebook users, and it has said that it will work on the KYC(Know Your Customer) base which needs a person to use some ID as a proof to be able to use it.
Good Publicity and Bad Publicity
Planning to launch in early 2020, Libra is not having a good start with its promotion. Sure there is a lot of media coverage for the product, and there are a lot of big names associated with the project. But it won’t be considered as a good start.
Over the years, the user count of Facebook has reached very high numbers, and it will work as a perfect platform for them to launch their cryptocurrency on. But then people are also aware of the facts that Facebook has been under questioning for using and mishandling the user data to generate revenue from advertisements by taking user data and their interests and showing them ads related to them.
Even though David claimed in the post that Facebook would not have any individual responsibility for the Libra network, and neither will the Libra platform use user data for their use. But after being all over the internet for mishandling data, it gets tough for people to trust them again.
It is working with more than 27 launch partners all over the globe, including PayPal, Visa, Uber, Mastercard, Spotify, and many others. They aim to have more than 100 members in the Libra Association; it will get a lot of publicity because of the user platform as well as because of its partners.
An incident that left everyone laughing was when Stuart Sopp, CEO of an online bank named Current, posted a tweet accusing Facebook of stealing their logo for their new cryptocurrency. This has left people all over the internet very disappointed.
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Libra is all set to be launched in the first half of 2020 and will be used to purchase products over the web, send and receive the money within friends or from other countries and to make donations.
But before even hitting the markets, Libra and Calibra are facing a lot of criticism from governments around the world. Many US and European politicians have raised most of the issues about this and the foremost reason being Facebook’s history with data security problems.
Maxine Waters, a California Democrat from the department of US House Financial Service Committee has asked the company to stop any further creation of the Libra base till they make sure that there won’t be any data tampering and give more information to Congress. A Senate committee has also been scheduled for the hearing to discuss the cryptocurrency on 17th of July, 2019.
Sherrod Brown, a Democrat senator also tweeted by saying that Facebook already has too much power which they used to exploit users data, and they can’t be trusted by people, especially when it involves money.
The Government in Europe had the same reaction to this news and Bruno Le Maire, France’s finance minister, that they would be okay with the functioning of Libra in Europe if it were just limited to transactions.
Governor of the Bank of England, Mark Carney stated that “anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation,” when asked about the project.
A similar statement was received from Markus Ferber, a German member of the European Parliament. He stated that regulators regarding Libra should be on high alert, because of the track record of Facebook regarding user data safety, it’s better to be safe than sorry. He also added that “Banking and payment services are areas that are tightly regulated for good reasons and an initiative such as Libra must not attempt to circumvent those regulations.”
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Ever since cryptocurrencies were introduced, they’ve faced a backlash from people as well as governments. Some countries, to avoid any frauds and issues, decided to ban any use of cryptocurrencies in the country. Along with this, strict actions were taken against those people who still tried to deal with cryptocurrencies.
With the potential risks that cryptocurrencies have when it comes to investing and other factors like how they can be used for money laundering or converting black money to bitcoins, many countries have taken the step to ban them.
China has such severe day to day privacy restrictions and concerns that they had to ban the usage of cryptocurrency. But despite the ban, many people in the country are still investing in different types of cryptocurrencies.
After China, Russia decided to ban the usage of cryptocurrency because of the suspicion that people and big corporations were using these currencies for money laundering and other purposes.
Bangladesh, Algeria, Brazil, Thailand, Nepal are some countries that have decided to put up restrictions on the usage of cryptocurrencies, or they have completely banned the usage of such cryptocurrencies.
Facebook has no plans or news for the Indian market regarding the launch of its digital wallet service Calibra. India has one of the largest user base of Facebook, and usage of cryptocurrency has been banned in India by the Reserve Bank of India(RBI).
Indian Government has asked the banks to not deal with cryptocurrencies hence causing the ban. Anyone found disobeying the orders or involved in cryptocurrencies can face sentences up to 10 years or heavy penalties.
But then we have countries like Africa where the trade and payment methods straight away moved from cash to mobile applications. They skipped the cards and went straight to mobile payments. Libra can play a significant role when it comes to forming a user base in a country that is already aware of the concept.
Mixed views on the introduction of Libra have left us with no option but to see what happens once its out. With the user base that Facebook has, this platform will see some success, but we have to see how long it lasts. On the other hand, cryptocurrency users are wondering if it’ll be a hit or not because Facebook is a part of this project, and nobody is ready to risk their data again.
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