Facebook is launching its own online currency - here's how it works
Social media giant Facebook has over 2.5 billion users worldwide. It stores and shares our data, and is at the forefront of discussions around data protections and online security. But would you trust the company with your money?
Facebook has now created a company called The Libra Association that is a new cryptocurrency provider.
Will Libra replace cash?
The Libra project was first announced in June last year as a way to revolutionise money transfer and make Facebook a global champion of the blockchain-based digital payment industry. Facebook claimed the cryptocurrency was more stable than the better known Bitcoin.
The social media platform initially wanted to have Libra tokens as a direct form on online currency, but it faced huge pressure from regulators.
It made a non-profit called Calibra which would act as a subsidiary. At the launch of Calibra, Facebook included 27 other companies and non-profits, as well as participating names such as Mastercard, Visa, and Stripe.
Political and regulatory bodies were concerned about the classification of this new "currency" as well as the opportunity to hide money transfers, helping money laundering and criminal enterprises to go undetected. Visa, and other companies, left the project after these concerns were raised.
When will Libra arrive?
France has said the cryptocurrency threatens the monetary sovereignty of countries and could undermine the whole global financial market. But, despite this, Facebook is pressing on.
Facebook is now making digital versions of currency that are in-line with global currencies, such as the euro and the dollar, while maintaining the provision of the Libra token. This will allow the company to act alongside the global financial market.
The social media's digital wallet is expected to launch this autumn.