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Facebook’s Libra Cryptocurrency Could Be Great, if Not for Facebook
Regulators shouldn’t let this get off the ground
Facebook has been trying to “fix” how we send and receive money for years through products like Facebook Credits and “Send Money to Friends in Messenger.” Enter Libra, an upcoming cryptocurrency that has a couple of modest goals: “Reinvent money. Transform the economy.”
Though you may be unaware, Facebook has been working toward this project for a long time. Earlier attempts at creating a new financial infrastructure, like Facebook Credits, focused on monetizing apps and services that were built on the Facebook platform. At the time, you could buy Facebook Credits, which would then allow you to make purchases in games like FarmVille, for example. Think of it like an in-app currency for the social network and its various appendages — more like gold in Candy Crush than actual money. Ultimately, it failed, in part because there wasn’t a broader use case.
But the idea maintains an appeal. Getting developers to use a Facebook “currency” would grant the company access to the valuable credit card details of millions of users buying virtual products — as well as a valuable cut of the transactions made using its tools.
Libra is the evolution of that early goal, now with grander ambitions. Facebook wants to completely reshape how people make online payments. By detaching from currencies like the U.S. dollar, Libra could bring instant, low-cost digital payments and transfers to anyone with a phone.
On paper, this is the ubiquitous, global cryptocurrency that fans of the technology have dreamed of since the dawn of Bitcoin. Thanks to Facebook, the year of cryptocurrencies going mainstream may finally arrive.
But this is Facebook, so as you can imagine, there are some issues here.
First: Why Libra matters
Bitcoin, cryptocurrency, and blockchain are now a part of the modern vocabulary, but they’ve really yet to demonstrate vast consumer appeal.
Few people are paying for their coffee with a Bitcoin-backed card or sending money to relatives on the blockchain, because it’s all too complex…
