Facebook Announces Details Surrounding Libra Cryptocurrency

Having a Facebook account is not a requirement to use Libra. That is the hands-off approach Facebook is working toward as it unveils its new blockchain along with the token that would run on it.

The project’s scope is far-reaching. It includes an independent consortium, Libra Association, and a new Facebook subsidiary, Calibra.

“Implied in this project is that wherever the Visa or Mastercard logo are accepted, Libra would follow suit,” Libra Association head of policy and communications Dante Disparte stated in an interview. “In so many ways it’s a great leap forward for cryptocurrencies and, in many respects, a mainstreaming of this asset class.” 

The Libra Association boasts a group of 28 founding members consists of PayPal, Mastercard, Visa, Coinbase, Lyft, Uber, and others.

Per the company, clients who are interested in transferring or holding Facebook’s Libra token will have several options to do so, with an initial focus on global remittances.

Calibra will create financial services and products around the Libra network, which would eventually be governed by the Libra Association. It plans to begin with a digital wallet for the Libra coin, allowing users to move funds and store their tokens locally.

Customers can use the wallet functionality via a new standalone app on Android and iOS, or through Facebook’s WhatsApp and Messenger services. The Libra blockchain is planned to roll out in full sometime in 2020.

“The central goal here really is financial inclusion,” Disparte noted.

TechCrunch previously reported that WhatsApp reached 1.5 billion active monthly users in Q4 of 2017. More than one billion adults worldwide are still unbanked. The new effort is designed to serve those population.

“The goal of this new project … is to build a financial ecosystem that can plug in and empower billions of people,” Disparte detailed. In company literature published Tuesday, Calibra stated:

“For many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account, and those numbers are worse in developing countries and even worse for women.”

“The cost of that exclusion is high – for example, approximately 70 percent of small businesses in developing countries lack access to credit, and $25 billion is lost by migrants every year through remittance fees,” Calibra added.

Several NGOs are involved in the Libra Association, including Mercy Corps, Kiva, Women’s World Banking, and Creative Destruction Lab. To be a “Social Impact Partner,” participating non-profits need to have a five-year track record of poverty alleviation work and an operating budget of over $50 million.

Calibra is looking to expand its services to enable clients to pay bills and buy products or services, like public transit access or coffee.

Based on a video showing the planned user interface, customers can instantly transfer funds to their friends. Users will be sending Libra coins, but they will view their balance in their local fiat currency.

When moving coins across borders, the app will display the fiat equivalent the recipients will see, with amounts denominated in the local currency.

“Just as the internet created a world of low-friction communication and information sharing, the hope with this public ecosystem and public utility is that we can create a world of value transfer and payment that has an equal low-friction property to it without sacrificing the governance standards in the traditional economy,” Disparte said.

Per a fact sheet, Calibra seeks to comply with various KYC and AML regulations in the jurisdictions where it conducts business. It registered as a money service business with the US Department of Treasury. Calibra is already working to obtain money transmitter licenses in US states which treat digital currencies as “the equivalent of money.”

The subsidiary will obey guidelines set by the Financial Action Task Force and other national regulators. It will not conduct business in jurisdictions that have banned digital currencies outright.

“Calibra is committed to keeping illicit activity off the platform and working with law enforcement globally,” the fact sheet read.

Calibra will also ask for ID verification to maintain compliance. However, social media profiles and financial information will not be linked, per the Libra white paper and company officials.

“The Libra protocol does not link accounts to a real-world identity,” the white paper detailed. “A user is free to create multiple accounts by generating multiple key-pairs.”

According to Facebook officials, other wallet providers can develop products on the Libra protocol when the network launches next year.

The Calibra wallet is leveraging the anti-fraud and verification procedures used by credit card providers and banks.

“Authorities charged with consumer protection have an important role to play in ensuring that all consumers, including the most vulnerable, can safely take advantage of financial innovation,” the fact sheet notes.