Would you trust Libra, Facebook’s new digital currency?
The cats out of the bag. Facebook has announced Libra, what it calls a new global cryptocurrency based on the blockchain, with a projected release for 2020. With over 2.38 billion monthly active users, Facebook commands massive global reach, but with it’s history of privacy scandals, would you trust Facebook with your money?
Facebook’s Libra coin differs from the cryptocurrencies we already know because it’s backed by a reserve of real-world currency with a value to match familiar stable currencies like the US dollar and the euro. This should in theory protect against price fluctuations.
These Zuck bucks could be used like any other regular currency for online transactions, banking, shopping and so on, and Facebook is keen to stress the convenience for countries with financial instability or little online banking infrastructure. Facebook will provide a digital wallet, Calibra, via a new subsidiary company of the same name.
However, there is good cause for skepticism about Facebook having it’s own currency. Despite assurances of user privacy and security, the social network has a terrible track record on both counts, failing users more than once.
And even if you think Facebook can be trusted with your personal finances, the idea of a powerful multinational company with its own currency has unsettling echoes of cyberpunk dystopia, and brings up uncomfortable memories of exploitative company scrip currencies of the previous centuries. Then there’s the potential of Facebook’s influence in politics being magnified by its financial power, or the facilitation of money laundering if the Libra is not strongly regulated and monitored.