Libra. It’s a word most of us know, and it’s a word most often associated with astrological signs. Facebook is hoping to change that. When people think of currency, Facebook wants them to recall Libra and vice versa.
Technically, Libra is a cryptocurrency, which is a form of currency you can access through your phone. While Libra is called a “cryptocurrency”, its platform has been built to perform as an answer to PayPal and Venmo. The difference? You can cash out Libra at a participating brick-and-mortar store or physical location.
Facebook describes Libra as, “A simple global currency and financial infrastructure that empowers billions of people.” While Libra has been a known entity for some time, Facebook is now releasing more detailed information on its product offerings, Libra and Calibra.
As early as next year, Facebook users and non-users will be able to access Libra and Calibra. How? For users of Facebook Messenger or WhatsApp, you can access it within the apps. If you aren’t a user, you can use the standalone Libra and Calibra apps. However, for Facebook users, Libra will be connected to their account. Don’t want information on what you purchase linked to your Facebook account? They’ve already thought of a workaround; enter Calibra. What is Calibra? It is a “digital wallet” that keeps all of your financial information private.
Think Libra will go the way of Google+? We’re not counting it out just yet. Heavyweights of industry like Mastercard, Visa, Uber, Lyft, and yes, even PayPal, have partnered with Libra to ensure its regulation and success. This collective partnership is known as the Libra Association and operating in Geneva, Switzerland. As a governing body, the Libra foundation will ensure the Libra Blockchain and Libra Reserve are operating at maximum efficiency. Think of the Libra Association as their answer to the NCUA. Industry giants involved in the Libra Association are heavily invested in the success of Libra/Calibra, investing 10 million each to be on the board. It’s safe to say that Libra in 2020 seems an inevitable possibility.
Facebook describes its mission with Libra:
“Our hope is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have. We recognize that the road to delivering this will be long, arduous, and won’t be achieved in isolation — it will take coming together and forming a real movement around this pursuit. We hope you’ll join us and help turn this dream into a reality for billions of people around the world.”
What does it all mean for the future? Facebook claims it has developed these systems to help the underserved of the world. While most references point to persons in developing countries, it’s just as easy to implement and utilize domestically. We believe this will transfer to teens and young adults who grew up with technology. Having such an easily transferable currency, it comes as no surprise that people will opt for using this system and remain unbanked. Why? Simple, people want convenience. And it sounds like Facebook and the Libra Association is dedicated to doing just that.
Whether it launches in 2020 or not, we haven’t heard the last of Libra, Calibra, or the Libra Association. It’s the responsibility of organizations, especially financial institutions, to not only be aware of these products and services but find a way to service their members and appeal to their desire for convenience. We believe Microsoft’s CEO, Satya Nadella said it best; “At the core of our business must be the curiosity and desire to meet a customer’s unarticulated needs. It’s when we live our mission and truly make a difference.”