Over the past years, Bitcoin has received a massive response from all over the world, making some of its traders instant millionaires, while costing many others their life savings in cryptocurrency deals. Since the world has become an electronic village, Facebook is one of the platforms that shares information with millions worldwide. On June 18, the social media giant formally announced details about its intended launch of a cryptocurrency under the name ‘Libra’, to be traded through its global website. The company is preparing to launch a payment system similar to that of Bitcoin.
Facebook’s plan to introduce this digital currency is to create a new financial system to transform the way money moves around the world, and not just in its own applications. In other words, it intends to make sending and receiving money around the world an easier process, just like sending and sharing pictures, videos, texts and other elements on its platform and applications.
After reviewing a number of digital or cryptocurrencies for some time, Facebook’s proposed cryptocurrency is on par with the demands of millions of tech-savvy people.
Facebook has the ability to run programmes that require trading, such as cryptocurrencies and digital operations, thanks to block-chain and its marketing relations with banking and global institutions along with world-renowned companies. However, global governments, especially in Europe, warn that this step can face difficulties and challenges during the transfer process that requires strict regulatory trading conditions and regulations, not to mention the potential risks of money laundering.
Accordingly, Facebook is working to create suitable conditions with a group of financial service providers through which money transfers can be carried out using Libra.
The success of this currency in trading will reduce the control of governments and central banks across the world, but this depends on how people understand the privacy provided by the company by manipulating or exploiting their data by others, especially as its reputation suffered a setback in the wake of the recent Cambridge Analytica data scandal.
According to Facebook, Libra is a decentralised digital currency that will be managed by a non-profit organisation based in Geneva, Switzerland, and will be widely available. Its aim is to be stable and secure, unlike other cryptocurrencies such as Bitcoin, which can be largely volatile and speculative.
Libra will be supported by relatively stable funds backed by the government, which will be responsible for its issuing. The higher the number of Facebook users, the more successful these transactions will be, experts believe. This means that Libra will not be managed by Facebook in the US, but an organisation located in Switzerland, which represents the heart of the global financial system.
The risky part in this cryptocurrency is money laundering. However, the team in charge of the Libra project affirms that this concern has been taken into account through the application of the Know-Your-Customer policy, which tracks the sources of funds to stop any operation related to money laundering and financing of terrorists and criminals, thereby creating a sense of reassurance among governments and financial and banking institutions worldwide.
Despite these differences of opinion, 27 companies and institutions of founding members stand behind this initiative, while Facebook aims to bring in 100 companies and institutions to support the launch of this currency by the beginning of next year, including payment partners such as Visa, Stripe, PayPal and other well-known companies that will be able to help traders accept Libra, and this day could not come any sooner.
Projects like this face difficulties and challenges at the outset, but as days go by, people will begin to accept them and even join in.
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