The fact that Facebook introduced a new currency, Libra, has been rumored for months, so it is not too surprising, but the astonishing thing is the support of many large financial institutions, along with It is Facebook's dream to operate a financial platform used by billions of people around the globe. It can change the way people fundamentally spend and access financial services, like how Facebook has changed the way people can talk to each other.
Libra and the reason for birth
Briefly, this coin is called Libra, this purse containing money is called Calibra. Calibra is also a newly formed company focused on building financial services and software based on blockchain technology. At first glance, Calibra looks like payment service providers, such as MoMo, ZaloPay, Google Pay, Apple Pay … However, Calibra has Facebook background, has a number of potential customers. Large, the universalization of financial services will be much easier than traditional financial institutions.
And yet, Calibra and the Libra can also integrate with WhatsApp, Messenger, Instagram and Facebook, with the API open for third parties to connect, so its potential is much greater. With the financial potential and huge number of users in hand, Facebook can do many things that we can't imagine.
Calibra's immediate goal is to develop and launch its virtual wallet, which will be integrated with Facebook's products. Facebook also created the Libra Association, including Uber, Lyft, eBay, PayPal, Mastercard, VISA and many technology companies, investment funds, and other financial services. These big companies have the right to decide similar Facebook in developing Libra. In this way, Facebook can say that they do not control or own this currency or own its network so it looks more independent.
This is also a difference of Libra compared to many other virtual currencies. Other co-currencies such as Bitcoin, Etherium, Bitcoin Cash … are not strongly supported by many large companies like this, so their solvency is more limited, the number of people (dare) use is less , the market acceptance rate is also slower. Thanks to its solid foundation, Libra is considered a stable coin – a stable currency.
In the immediate future, to buy Libra, you can use your bank accounts, you can use cash to buy Libra at the service points in real life, even in the future there may even be counters. exchange foreign currency "for you to buy and sell Libra. How to get Libra will be the question that we have to wait for Facebook to develop more to get a clear answer, it is still too early.
Facebook became a digital bank
With Libra in hand, you can imagine Facebook being like a bank. Facebook can lend, do credit, money transfer, payment, and trade services … Facebook is in your hands, where you go, what you do, what you like, how it is illegal. Facebook also understands so they can decide whether to lend you, how much money, are you a fraud, should you be transferred or not … The power of this data is horrible, the banks Financial products and services cannot be matched even if they attempt to scoop data from Facebook.
Kevin Weil, Calibra's vice president of products, said that the wallet feature will be available in Facebook Messenger and WhatsApp because there are currently more than 1 billion people using these two apps, and it also has its own app for iOS and Android. (convenient for those who do not use Facebook). Calibra's feature will have 2 main features:
- Keep your money safe, and free
- Allows you to transfer money (payment) to anyone in the world with a small transfer fee compared to the current international money transfer fee.
One of Libra's markets is developing countries, where not many people have bank accounts or credit cards (so e-wallets, PayPal or online money-receiving services cannot be used). with this group of people). Facebook did a survey of WhatsApp users in these countries and found that users often take photos of money transfers and send them to others. Some people even use this image to receive money across borders.
However, this is troublesome, difficult to use and expensive. "Why do you have to spend a lot of money to get money transferred?" That's what Facebook wants to solve. "We want to send money as easily as sending a message."
Safe, identifiable, and many users
In order for the transaction to be safe and unmodified, Facebook uses Blockchain technology to operate the Libra. You will also have to verify your identity when using Libra to avoid money laundering and other monetary crimes. Of course, another company could build Libra anonymously, but that was their business. As for Facebook, they have to keep their reputation and avoid legal troubles.
Weil explained that if Calibra would ask you to register with a identity card or a document issued by the state. Facebook and for Calibra pledge not to share the user's financial data or transaction history with advertisers. Facebook data will also be separate from Calibra data.
So that means Facebook can't benefit from advertising, so will they make a profit from the transaction fee? Weil said it was not, Facebook wanted to reduce the transfer fees and transaction fees as low as possible. Facebook does not intend to charge if you transfer money from one person to another, with businesses that may charge a small fee, but only charge enough to operate the anti-fraud and refund engine money when needed only.
The real goal of Facebook is to make "Libra" so popular that any company in the world wants to use Libra. That's why Visa and Mastercard are involved because they can convince millions of payment points around the world to accept Libra. Companies like Uber and Lyft help users get to know Libra through their car calling service. "People who previously could only pay in cash now suddenly have a currency on their phones."
The successful and widely accepted Libra will have a positive impact on everyone. "You will have billions of customers for the online service you build. Cash-operated businesses can now switch to using Libra to save costs, increase safety and not have cash storage. Those who do not have an account or bank card to run Facebook ads also have a payment method, which is also a benefit for Facebook's business. "
Libra will exist in parallel with other virtual currencies, but its value is not equal to how many dollars or euros, but what it will be used to pay.