Facebook reveals new digital currency details

Social media giant Facebook has unveiled plans to launch a new digital currency, called Libra, next year.

It said people would be able to make payments with the currency via its own apps, as well as on messaging service WhatsApp.

Firms such as Uber and Visa are also likely to accept it in future, it said.

But there have been concerns about how people’s money and data will be protected, as well as over the potential volatility of the currency.

Facebook said Libra would be independently-managed and backed by real assets, and that paying with it would be as easy as texting.

It is the latest foray by a tech giant into the payments sector, after Google Pay, Apple Pay and Samsung Pay – although none of those services are based on a crypto-currency.

What will this mean to Facebook users?

According to Facebook, from next year you will be able to buy Libra via its platforms and store it in a digital wallet called Calibra.

You can then send your Libra to other users, it said, “as easily and instantly as you might send a text message”.

“In time, we hope to offer additional services for people and businesses, such as paying bills with the push of a button, buying a cup of coffee with the scan of a code, or riding your local public transit without needing to carry cash or a metro pass.”

It said transactions would be at “low to no cost”, although the firm is expected to take a small commission on payments made through its platforms.

It is a hugely ambitious – some might say megalomaniacal – project to create a new global currency.

But the message is that this is not some little side project that a small team at the firm’s Menlo Park headquarters will try out for a few months before moving on to something else.

This is both the future of Facebook and the future of money, an initiative which has seen an alliance of big players in payments such as Paypal and Visa, Silicon Valley players like Uber and Lyft and major venture capital firms.

But there are still many questions about FaceCoin – or Libra as the firm wants us to call it. The principal one I keep coming back to is – why?

Who else will accept Libra?

Facebook stressed Libra would be managed independently by a group of companies and charities – of which Facebook is just one – called the Libra Association.

It said Libra payments are likely to eventually be accepted by all the group’s members, which currently include:

  • Payments firms such as Mastercard and PayPal
  • Digital businesses including eBay, Spotify and Uber
  • Telecoms firms such as Vodafone
  • And charities such as the microfinance group Women’s World Banking.

Facebook also said it expected Libra would be bought and sold on currency markets in the future.