What is Libra?
Libra is the name of the new cryptocurrency that supports Facebook and which will be launched in 2020 and will be used once in circulation to purchase digital service from a user's smartphone.
The digital currency is stored in a digital wallet called Calibra, an independent app on a user's smartphone or housed in services owned by Facebook, such as WhatsApp and Messenger.
It is supported by Visa and Mastercard, as well as companies such as Uber, Spotify and eBay, which means that users can eventually use the currency to pay for almost everything, from their weekly shopping to an Uber trip or their Spotify subscription.
How does cryptocurrency work?
Cryptocurrencies are fully digital forms of money that use encryption to carry out transactions securely and in many cases anonymously between two parties, many of which claim to be more secure against fraud.
An important advantage of cryptocurrency is also that it is decentralized, meaning that no entity manages the currency, unlike how a central bank manages traditional currency.
Currencies are often based on blockchain networks, a type of digital ledger technology where all transactions are publicly verified and recorded and cannot be changed – creating an information chain and improving transparency.
How is Facebook different?
The two biggest problems for cryptocurrency so far, says Facebook, are scalability and volatility. Bitcoin, for example, has seen its price fluctuate sharply in recent years because its price is linked to supply and demand.
However, Libra needs to be supported by a reserve of assets – including a link with different international currencies – from a number of central banks to keep its prices stable.
The developers have said that launching via Facebook apps will also make it immediately accessible to more than two billion people worldwide – the number that use a Facebook app every month.
How can users buy Libra?
When the Calibra wallet for Libra is launched, those who want to use it must sign up for an account with a government-issued ID.
Users can then convert their money into Libra and add it to their digital wallet. Once in place, the currency can be used to pay for "daily transactions, such as buying a coffee, buying groceries or taking public transportation."
Facebook initially said that the new payment system will support peer-to-peer payments between individuals, as well as some other ways to pay for goods and services – for example, by scanning a QR code.
The system will eventually be expanded with integration into point-of-sale systems in stores, allowing in-store payments that work in the same way as paying with a bank card or credit card or using contactless.
Because it is also built into WhatsApp and Facebook Messenger, users can also send and receive money between their friends and family just by sending them a message.
This will also work with all companies with which they communicate on those platforms, Facebook said.
When will it be available?
The full Libra system and Calibra's digital wallet are expected to be completed in the course of development.
. [TagsToTranslate] Dailymail