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Facebook plans to launch a digital currency that will enable people to make instant international payments almost free of charge.
The digital currency, known as Libra, promises to help bring almost two billion unbanked people into the financial services system.
Libra is already attracting backing from companies in the finance and tech sector, including Visa and Spotify.
According to the Libra Association, which has been set up to govern Libra, it is built on a secure, scalable and reliable blockchain, and is backed by a reserve of assets designed to give it intrinsic value.
A white paper from the Libra Association, which according to Facebook is an independent, not-for-profit organisation, said that despite the transformational impact of the internet, large populations still don’t have access to the financial system. Libra seeks to change this.
“The advent of the internet and mobile broadband has empowered billions of people globally to have access to the world’s knowledge and information, high-fidelity communications and a wide range of lower-cost, more convenient services,” said the An introduction to Libra white paper.
“Despite this progress, large swaths of the world’s population are still left behind – 1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone and nearly half a billion have internet access.”
Read more about Facebook in financial services
- Facebook has introduced a feature to its Messenger app that enables people to transfer money to their friends in a few clicks.
- Facebook is planning to test a mobile payments feature which will automatically fill in payment details when purchasing on mobile apps.
- Facebook shutters Messenger payments in the UK, as Brits are just not into it.
The white paper added: “The world truly needs a reliable digital currency and infrastructure that together can deliver on the promise of ‘the internet of money’.”
Libra Association members come from the payments, technology, blockchain, venture capital and not-for-profit sectors, and include Mastercard, PayPal, Stripe, Visa, eBay, Spotify, Uber Technologies, Vodafone Group, Coinbase, Andreessen Horowitz, Thrive Capital, Union Square Ventures and Women’s World Banking.
PayPal said: “PayPal plans to join other leading technology and financial services companies to form the Libra Association. We believe in democratising participation in the digital economy for people from all walks of life, and businesses of all sizes.”