Can we trust Facebook’s Libra cryptocurrency?

Social media giant says currency will “empower billions of people” but critics warn it could threaten privacy.
 

Just 15 years ago Mark Zuckerberg launched Facebook from a college dormitory in Massachusetts, beginning a dizzying rise to its current position as the world’s ubiquitous social media network. Now Facebook is on the verge of launching a new digital currency called Libra .

Libra is being touted as a global currency that will allow individuals to make instant transactions through approved apps, underpinned by secure “Libra blockchain” technology. Major companies including eBay, Mastercard, Visa and Vodafone are backing the Libra currency, which will be pegged to a reserve of ‘real’ currencies such as the US dollar and Euro and be made available through services created by a new Facebook subsidiary called Calibra .

The private firms forming the membership of the ruling Libra Association say Libra will be “a simple global currency  and financial infrastructure that empowers billions of people”, especially hundreds of millions of people in developing countries  who do not have bank accounts and who often pay hefty service fees when using traditional money remittance services.

Critics, though, have been quick to sound a note of caution  about Libra, not least that eventual omnipresence of the currency could undermine the ability of central banks to set domestic monetary policy during times of economic stress. They say the currency may be attractive to those involved in illegal activity and money laundering, as well as those looking to evade financial sanctions. Even Facebook’s co-founder Chris Hughes is among those concerned  that Libra will essentially be self-regulated by powerful private companies in thrall to their shareholders, and that users of Libra will have little control over how the transaction data that flows through Libra’s servers is used.

Does Libra signal liberation, or is it an example of over-reach by Facebook and its partners? Join the conversation on Wednesday to find out.

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