Facebook’s plan to revolutionise how money works, and why companies and lawmakers are so worried about it, explained in 30 seconds

Susan Walsh/AP ImagesFacebook CEO Mark Zuckerberg testifying before the US House Committee on Financial Services in Washington DC on October 19, 2019.
  • Facebook is trying to launch its own cryptocurrency: Libra.
  • Libra will be managed by the independent, nonprofit Libra Association and transferred on digital wallet Calibra, a subsidiary of Facebook.
  • Lawmakers are wary of a corporation’s attempt to create its own currency, and Facebook has assured the government that it will not launch without approval from all appropriate regulatory bodies.
  • Visit Business Insider’s homepage for more stories.

What is Libra?

It’s Facebook’s attempt at creating a digital currency, otherwise known as “cryptocurrency,” and it has already landed two Facebook executives in front of the US House Committee on Financial Services since it was announced in June.


Here’s a 30-second explanation of what Libra is:

Reuters

Libra is Facebook’s attempt to create a cryptocurrency, basically: digital money.

The Libra Association will monitor Libra. The independent non-profit will be based in Switzerland and composed of 100 companies, academic institutions, and other organisations. Currently, the association has 21 members including Uber, Lyft, and Spotify. It has lost seven since members since June, including PayPal, MasterCard, and Visa.

Calibra, a Facebook subsidiary, will serve as a digital wallet for users to send and receive Libra and other cryptocurrencies.


What’s the problem?

AP Photo/Andrew HarnikDavid Marcus, head of Calibra, testifying at the House Financial Services Committee hearing on Libra in Washington, DC on July 17, 2019.

Mark Zuckerberg told lawmakers in October that, “the idea behind Libra is that sending money should as easy and secure as sending a message.” Libra, and digital wallet Calibra, could serve as a digital, financial architecture that brings banking to the underserved, according to Facebook.

Lawmakers are wary that a corporation wants to create a currency. Facebook CEO Mark Zuckerberg and head of Calibra David Marcus both testified before the US House Financial Services Committee in October and July, respectively, to answer this question.

“The committee questioned Zuckerberg on issues such as whether Facebook should be trusted to handle financial data, why Facebook wants to develop a new digital currency instead of using the dollar, how Facebook is working with regulators and lawmakers, and whether or not it’s willing to shelve the project if necessary,” Lisa Eadicicco wrote for Business Insider about the October hearing.


Here’s a 5-minute timeline from the present to Facebook’s Libra announcement, via our past coverage.

Facebook

October 23

Zuckerberg said Facebook would drop out of its controversial payments project if US regulators don’t approve it

Bitcoin falls to its lowest level since June as Zuckerberg testifies on Libra

Lawmakers just grilled Mark Zuckerberg about his company’s big plan to upend the way we send money around the world – but the questions he didn’t answer dominated the conversation

Facebook CEO Mark Zuckerberg is trying to drum up support for the firm’s wild new currency by amping up worries of China’s financial dominance


October 22

Lawmakers are getting ready to grill Facebook CEO Mark Zuckerberg over the Libra cryptocurrency project. But they may not get the answers they’re looking for.


October 21

Facebook is considering using ‘stablecoins’ pegged to the value of real-world currencies to power its digital currency efforts


October 18

The head of Facebook’s controversial new cryptocurrency project explains why you don’t need to trust Facebook for it to work

A Republican senator just gave Libra its first voice of support in Congress after its rocky start with regulators and partners


October 17

JPMorgan and Goldman Sachs reportedly rejected any involvement in Facebook’s Libra cryptocurrency because of fears it would be used by criminals


October 16

Facebook’s blockchain boss David Marcus defends the feasibility of Libra after a quarter of its partners drop out


October 15

Facebook’s Libra cryptocurrency plan just got formalised, but a quarter of its backers have now dropped out

Facebook’s Libra is the US’s best shot at beating China to become the dominant digital currency for emerging economies, analyst says


October 14

Facebook’s cryptocurrency project suffers massive blow as MasterCard, Visa, eBay, and others withdraw from Libra


October 9

Facebook’s Libra project unravels further as US lawmakers urge Visa and Mastercard to quit

Mark Zuckerberg will testify before Congress later this month, and he’s likely to face tough questions about Facebook’s Libra cryptocurrency


October 4

Facebook’s cryptocurrency push takes a big hit as PayPal cuts ties with Libra

Apple CEO Tim Cook just took a not-so-subtle shot at Facebook’s decision to create a cryptocurrency, saying companies ‘shouldn’t be looking to gain power this way’


October 2

Facebook denies there’s ‘angst’ about its Libra cryptocurrency plans amid reports partners like Visa and Mastercard might pull out


September 4

Europe’s top antitrust enforcer is already examining Facebook’s Libra currency so that it can ‘act swiftly’ if intervention is necessary


August 25

Facebook’s key partners on its cryptocurrency Libra are refusing to publicly support it


August 20

The EU is reportedly investigating Facebook’s Libra cryptocurrency over antitrust concerns


July 23

Facebook’s cryptocurrency isn’t available yet, but scammers are already trying to trick people into buying fake versions of Libra


July 19

A US congressman is standing by his statement that Facebook’s Libra cryptocurrency will be worse than 9/11


July 17

Bitcoin tumbles after US lawmakers take aim at Libra – ‘Facebook has burned down the house over and over’

US Congressman Brad Sherman says Facebook’s Libra cryptocurrency ‘may do more to endanger America’ than 9/11

Alexandria Ocasio-Cortez’s exchange with Facebook’s crypto boss exposed a big problem about who actually controls the Libra currency

Facebook must overcome a severe lack of trust if it hopes to bring Libra, its new cryptocurrency, to the masses

A Michigan congressperson said Facebook’s Libra cryptocurrency reminded him of a ‘platypus’ but then decided it was more like a traveller’s check


July 16

Facebook’s cryptocurrency plans hit a bipartisan wall of suspicion from US lawmakers: Why should anyone trust Facebook?

Facebook said its Libra cryptocurrency will be regulated by Swiss authorities – but that was news to those Swiss authorities

US Treasury Secretary Mnuchin warned that Facebook’s Libra could be a tool for terrorists, traffickers, and drug smugglers

Bitcoin takes a tumble as US lawmakers grill Facebook on plans to introduce its own Libra cryptocurrency

[OPINION] It’s absurd that we’re even entertaining Facebook’s Libra currency idea


July 15

Facebook blockchain boss David Marcus says Libra won’t launch until it has ‘fully addressed regulatory concerns’


July 12

Mark Cuban thinks Facebook’s cryptocurrency Libra is ‘a big mistake’


July 5

New data shows one big reason people will be more willing to invest in Facebook’s cryptocurrency


July 2

Democrats on the House Financial Services Committee are asking Facebook to put its cryptocurrency plans on hold

We just got a clear sign that Facebook’s dodgy reputation means it has a massive struggle to persuade people to use its new cryptocurrency Libra


July 1

Facebook had to invent a totally new programming language, Move, for its Libra cryptocurrency project because no other language was up to the task


June 28

Facebook had to invent a totally new programming language, Move, for its Libra cryptocurrency project because no other language was up to the task


June 25

The Fed’s Chairman said Facebook’s cryptocurrency has the potential to be so big that it will be regulated with a ‘very, very high’ standard


June 19

Libra promises to become a global payment system by 2020, but there’s a gaping hole in their plan

‘Facebook is already too big and too powerful’: Senate to dig into Libra, the tech giant’s new crypto project

Facebook’s new cryptocurrency brings it one step closer to becoming an independent ‘virtual nation’

6 things we’re still wondering about Libra, Facebook’s new cryptocurrency coming in 2020

Facebook’s facing a bunch of questions about its new cryptocurrency. How it addresses them will make or break the service.

Astrologists and Libras are furious that Facebook named its new cryptocurrency after an astrological sign that promotes balance and fairness


June 18

Facebook just took the wraps off Libra, a new cryptocurrency that will let anyone in the world pay with their smartphone

Here’s what Facebook’s new cryptocurrency Libra will look like and how it will work

US lawmakers are demanding scrutiny – and even a freeze – of Facebook’s cryptocurrency project

Why USV is Joining the Libra Association

Mark Zuckerberg’s ‘shadow bank’: The pushback against Facebook’s new cryptocurrency has already begun

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