Facebook (NYSE:FB) and 27 partners including Visa and Uber are developing a crypto currency called Libra, a digital token they hope will be used in everything from business transactions to money transfers.
Libra is expected to launch in 2020 and will be a blockchain-based coin that will let Facebook users send and receive money or pay for things. Eventually, they hope it will be used to pay for a taxi or a cup of coffee.
An analysis by Techcrunch explores the technology and motive behind the plan. Techcrunch says Libra isn’t aiming at traditional bank customers, but those without traditional banking services. The World Bank estimates there are 1.7 billion people in poor or emerging economies in this position. The idea is that storekeepers will let people convert cash into digital Libra coins, which could be deposited into digital wallets for use as payments.
Facebook’s partners such as Visa Inc., MasterCard and Paypal have their own reasons for joining in. If Libra goes according to plan, it could one day compete with them.
The initiative is facing close scrutiny in Europe, where central bankers and regulators want more detail on the project.
As reported by Reuters, Britain’s top financial regulator said there was not yet enough information to understand Libra, adding that it could be very significant for public policy and that it would not easily get the go-ahead without further disclosure.
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