SAN FRANCISCO/NEW YORK (Reuters) – Facebook Inc. has announced an ambitious plan on Tuesday to launch a new global cryptocurrency, called Libra, which is part of an effort to expand into the digital payments, which immediately raised privacy concerns.
The social networking giant has tied up with 28 partners, including credit card, PayPal, and Uber forms, Scales of the Association, a Geneva-based entity, which is the new digital currency, according to the marketing materials, and interviews with managers. None of the banks are still part of the group.
Is to facilitate transactions, and Facebook also made the Calibra, which is a subsidiary of the digital wallet to store, send, and pay Scales. Calibra will be connected to the Facebook, messaging platforms, Messenger, and WhatsApp.
The entire system is scheduled to launch in the first half, by the year 2020.
Facebook executives and others associated with the sign Libra and have big dreams. It is an honor to not only have the power of transactions between the incumbent, consumers, and businesses all over the world, but to provide unbanked consumers access to financial services for the first time.
Facebook is also a betting Scale is you can get more revenue from the suite of apps, something that has been done on the Chinese social networks like WeChat.
Representative Maxine Waters, the chairman of the u.s. House Financial Services Committee, have called for Facebook executives to testify before Congress, and asked the company to halt development of the balance to the legal and regulatory requirements a review of the project.
“With the recent announcement that it plans to create a cryptocurrency, Facebook is continuing its uncontrolled expansion, and the expansion of the market share in the lives of their owners,” Waters said in a statement.
Other regulators, legislators, and government officials around the world, issued a critical statement. The French finance minister, said that he had asked the central bank chiefs of the G7-countries, in order to write a report on the project in mid-July.
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A Facebook representative said the company was looking forward to the response of the lawmakers ‘ questions.
Prior to Tuesday’s announcement, Facebook was confronted with a significant impact on misuse of the data by the user, and do not have enough to do in order to prevent Russian interference in the 2016 presidential election. These problems have led to the fact that some of the officers of the government, in order to make a call to Facebook and punishable by fines, or be forced to be broken.
Kevin Weil, who runs all of the product, the Scale initiative, said of Facebook, it is hoped, can bring to the global regulators to the table, with the publication of the plan.
“It gives us a basis to go on and have productive discussions with the regulatory authorities around the world,” he told Reuters. “We are excited to do just that.”
The name “Scale” comes from the ancient Roman weight, measurements, astrological sign, for justice, and that is the French word for freedom, said David Marcus, who was at the head of the project on Facebook.
“Freedom, justice, and money, and that’s exactly what we’re trying to do here,” Marcus said in an interview.
Facebook shares closed up 0.1 per cent.
IN THE NON-REGULATED SECTOR
Facebook is one of the least-regulated areas of finance, for its foray into the sector.
A 3-D-printed with Facebook logo is seen in front of binary code in this picture illustration, the 18th of June, 2019 at the latest. REUTERS/dado Ruvic/Illustration
Bitcoin is the most well-known digital currency, was created in 2008 as an alternative to traditional currencies that are controlled by governments and central banks. Some countries have sought to find ways to regulate the market since then, but the crypto market is largely unattended.
In the meantime, you have investors lost hundreds of millions of dollars due to the steep price drops, and a crypto-exchange projects. The market also has a lot to do with the purpose of money laundering and the financing of the war.
But Facebook’s status as the Silicon Valley behemoth is touching millions of people all over the world, help you identify what is a niche and volatile market.
The other Scales of the members of the Association include companies like Visa, Spotify, eBay, and Vodafone, as well as venture capital firms such as Andreessen Horowitz.
They hope to have 100 members by the Balance to start. Everyone gets one vote on major decisions, and companies will need to invest at least $10 million or more to join in.
The group has set itself the goal of raising funds through a public offering in the next few months. Facebook is not going to maintain a leadership role in and after 2019.
Even though there are no major banks are among the first members, and there have been discussions with them, ” says Jorn Lambert, executive vice president of digital solutions at Visa.
The big donors are waiting to see how regulators and consumers will react to the project, before deciding whether to become a member, ” he said.
Some of the Scale’s backers recognised that the privacy of the consumer, incidents, or regulatory resistance to be able to interfere with their lofty goals, and detailed some of the steps they are taking to get ahead in the business.
For example, the Calibra’s plans to carry out controls to verify compliance with the customers who want to sign up with the help of an authentication and anti-fraud processes, which are common among the banks.
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The subsidiary company will only share customer data with the Facebook or third parties, if they consent, or, in “exceptional cases” where it is needed, it is on Facebook, said. That would allow for the enforcement of the law, public safety, or the overall system functionality.
Sri Shivananda, PayPal’s chief technology officer, said that the project is still in its “very, very, very, very early days” in terms of the obtaining of the necessary approvals from the regulatory authorities, and consumer buy-in.
And, in Mastercard’s Lambert said that if the project receives a lot of pushback, ” can’t we start from.”
(For a graphic on Bitcoin futures, click tmsnrt.rs/2Wt4AwE)
Reporting by Katie Paul and Anna Irrera; additional reporting by Brenna Hughes Neghaiwi in ZURICH, switzerland, by Francesco Guarascio in BRUSSELS, belgium, Huw Jones and Sinead Cruise and Tom Wilson, in LONDON; the Rest of the Handle, and Inti Landauro in PARIS,; Michelle Price and Pete Schroeder of WASHINGTON; Editing by Lauren Tara LaCapra, Lisa Shumaker and Nick Zieminski