Briefing: Uptake of Facebook's Libra will depend more on regulations: Pony Ma

Saturday, 22 Jun, 2019

Under this structure, Calibra's financial data will be separate from Facebook's social data or so we're told.

Head of Calibra, David Marcus said, "Libra has the potential to provide billions of people around the world with access to a more inclusive, more open financial ecosystem".

"It is frankly baffling to me that a company with a massive data privacy problem launched a non-private global currency", said Matthew Green, associate professor of computer science at the Johns Hopkins Information Security Institute in the U.S., via Twitter.

That said, I detect some scepticism amongst the regulators about the prospects for Facebook's currency in the UK.

In this January 9, 2019, file photo, media and guests tour Facebook's new 130,000-square-foot offices, which occupy the top three floors of a 10-story Cambridge, Mass., building. Here's what you need to know.

Powell, however, explained that the Fed does not have "plenary authority" over cryptocurrencies like Libra, although it could make a significant input on payment systems through global forums. It also said that one of its subsidiaries (called Calibra) is building a wallet (called Calibra) that will let you "save, send and spend Libra". Unlike the others, the company says, Libra's value will be tied to real money backed by banks and government securities in major currencies like the USA dollar, euro, yen and others.

Companies creating Libra are in for a "rude awakening" if they expect the same model of light regulation, said Karen Shaw Petrou, managing partner of Federal Financial Analytics in Washington.

How much are Libra worth?

Libra's value will fluctuate according to the movement of these assets. It's not a coin you'd buy in the hope that it would grow to be 100 times as valuable.

According to Bloomberg, Le Maire "called on the Group of Seven central bank governors, guardians of the global monetary system, to prepare a report on Facebook's project for their July meeting". Unsurprisingly, there are a number of privacy concerns regarding a finance app run by the social media giant. The primary concern raised by the G7 relates to money laundering, with the coalition looking to ensure that the cryptocurrency has adequate controls to prevent this. McNamee, who has been an outspoken critic of the platform, is also the author of "Zucked: Waking Up to the Facebook Catastrophe". "Facebook insists that 1.7 billion people without bank accounts in developing countries need it; unusual they can't see that M-Pesa fits the bill already..." Facebook CEO, Mark Zuckerberg, said Libra will be secured by cryptography "which helps keep your money safe".