Facebook unveiled plans Tuesday to release its own cryptocurrency, called Libra, which may be delivered to users as soon as next year, according to Fortune.
Users will be able to shop and send the currency on Instagram and Messenger, and through partners like Spotify, Uber, and MasterCard. They’ll also offer a digital wallet app called Calibra, to store, track, and spend the Libra currency. Libra will be aimed at ordinary mainstream users, in an unprecedented effort to bring a digital currency into the mainstream.
Eventually, the company hopes to see Libra used widely, for routine financial transactions like bills, retail, and transportation. Libra could also ease international transactionsbetween people in developing nations and their families abroad, remittances which currently depend on services like Western Union.
The “Project Libra” effort is led by former PayPal executive David Marcus. And while Facebook is spearheading the effort, they’re just one member of the Libra Foundation, a group of corporate and non-profit members that will manage the currency, including Visa, Mastercard, PayPal, and venture capital firms.
Each member will contribute $10 million get the currency off the ground, and will maintain the supply in response to demand. To avoid the volatility of cryptocurrencies like Bitcoin, Libra will be backed one-to-one by other currencies like the dollar and the euro.
As a blockchain-based payment system, transactions with Libra will be recorded by the network. But unlike Bitcoin, the record will only be accessible to the foundation.
To address privacy concerns following recent scandals over its handling of user data, Facebook said its Calibra subsidiary will cooperate with outside partners to maintain a “separation between social and financial data.”
But just hours after Facebook revealed its Libra project, Democratic Representative Maxine Waters, chair of the House Financial Services Committee, asked the company to stop work on its development of the cryptocurrency.
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action,” she said in a statement.
Other lawmakers, including the ranking Republican on the committee Patrick McHenry, echoed skepticism over the Libra plan:
“While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework.”