Now Facebook wants to create its own currency
Is the social media giant turning into a shadow government? This is the warning from some experts, today, after Facebook announced ambitious plans to launch a new global currency called Libra.
The announcement was so ambitious that, for many, it was simply breathtaking.
Here was one of the biggest companies in the world, already in deep trouble with governments and regulators across the planet for its ability to know our innermost secrets, manipulate them and profit from them, declaring that it was now to make the most controversial step of all.
It was going to move into the one area of society that had hitherto been protected by banks and financial institutions. It was bidding to take over our money.
And it was to do this in the most brazen way possible, not by launching its own debit card, or launching a new alliance with a company like the Bank of America, but by launching its very own currency called Libra.
According to Facebook yesterday, from next year, you will be able to buy Libra via its platforms and store it in a digital wallet called Calibra.
You can then send your Libra to other users, “as easily and instantly as you might send a text message”.
“In time, we hope to offer additional services for people and businesses, such as paying bills with the push of a button, buying a cup of coffee with the scan of a code, or riding your local public transit without needing to carry cash or a metro pass.”
It said transactions would be at low to no cost, although the firm is expected to take a small commission on payments made through its platforms.
People would be able to make payments with the currency via its own apps, as well as on messaging service WhatsApp, and firms such as Uber and Visa are also likely to accept it in future.
Facebook itself is adamant: this is an idea that will be good for humanity. According to David Marcus, the man in charge of running the project, Libra could be “a profound change for the entire world”.
It will make handling money easier, cheaper, faster and fairer. Over a third of the world already uses Facebook, or one of its other services. Now, they will be able to exchange money as if they are in the same country.
Crossing a line?
The crystal ball is dark and we should be very afraid, says one commentator this morning. This “heralds the rise of the corporation-government, potentially shaping the already vast powers of the Silicon Valley giants into a borderless, unaccountable techno-oligarchy”. Facebook already holds the keys to our speech, our inner thoughts and our perception of reality. It holds sway over elections. Now, it may hold our wallets too.
Not at all, goes another view — this is just good business. And good business has made our lives so much better over the past 100 years, why would we be against it? Facebook is not alone in seeing the appeal of a digital currency. Goldman Sachs and JP Morgan have shown interest too. Microsoft has a blockchain product. Grafting a digital payments system to a gigantic social media network has not been tried before, but makes perfect sense.
- Is Facebook too powerful?
- Should money be left to banks?
- Our picture imagines a “Zuck” cent. Can you do better? Design the logo for a Facebook “Libra”.
- Write a short story set in 2025, when Facebook knows everything about you…and, suddenly, your life starts getting very very weird.
Some People Say...
“The digital serfs of the future may point to this moment as a turning point: when Facebook started printing its own money.”Ethan Lou, author and journalist
What do you think?
Q & A
- What do we know?
- There are 1.7 billion people in the world without a bank account. It is currently very expensive for them to transfer money. Libra would make it easier for them and take a much smaller fee.
- What do we not know?
- Whether Facebook will protect the privacy of Libra’s users. It has made such promises in the past — only to leak millions of account details. And how would it be able to stop Libra being used to hide illegal activity, such as selling drugs?
- It means “scales” in Latin and is, of course, the name for one of the signs of the zodiac. It is also the Latin word for a pound in weight.
- A blend of a business (which exists to make a profit for its owners) and a government (which exists to run a nation on behalf of its citizens).
- A technology-based organisation headed by one person, who ultimately has all the power. The opposite of a democracy where power is given to the people.
- Goldman Sachs and JP Morgan
- The names of two giant American financial services and investment banking companies.