Facebook unveils ‘Libra’ cryptocurrency, ‘Calibra’ wallet: Everything you need to know

Facebook on Tuesday formally unveiled blockchain-based cryptocurrency, Libra. Set to launch in 2020, Facebook's cryptocurrency will be accessible to everyone with smartphone and data connectivity. Facebook has also introduced "Calibra" digital wallet that will support the new cryptocurrency. The wallet will be available in Messenger, WhatsApp and as a standalone app.

Facebook says users will be able to use Libra cryptocurrency for online and offline services. To push the new cryptocurrency, Facebook has formed a nonprofit Libra association with 27 partners.

The new service is backed by cryptocurrency exchange Coinbase and payment companies such as Mastercard, PayPal and Visa. Companies such as Uber, Vodafone, eBay, Spotify and Lyft are also part of Facebook's Libra Association.

Facebook aims to have 100 members before the official release of Libra cryptocurrency.

"The world truly needs a reliable digital currency and infrastructure that together can deliver on the promise of "the internet of money"," said Facebook in its white paper.

"Securing your financial assets on your mobile device should be simple and intuitive. Moving money around globally should be as easy and cost-effective as — and even more safe and secure than — sending a text message or sharing a photo, no matter where you live, what you do, or how much you earn. New product innovation and additional entrants to the ecosystem will enable the lowering of barriers to access and cost of capital for everyone and facilitate frictionless payments for more people" it added.

How Libra cryptocurrency works

Libra is based on "Libra Blockchain" while the unit of currency is called "Libra." The cryptocurrency is backed by a "reserve of assets designed to give it intrinsic value." The currency is governed by the above mentioned Libra Association.

Facebook says Libra is backed by reserve of real assets unlike several other cryptocurrencies.

"To drive widespread adoption, Libra is designed to be a currency where any user will know that the value of a Libra today will be close to its value tomorrow and in the future. Just as consumers in Europe know the number of Euros it takes them to buy a coffee today will be similar to the number of Euros it will take them tomorrow, holders of Libra, too, can be confident the value of their coins today will be relatively stable across time," Facebook explained.

Calibra wallet and privacy

Facebook assures Calibra will come with strong protections to ensure users' money and information safe. The wallet will use verification and other measures that banks and credit card companies use. There will also be a dedicated support to help users retrieve their passwords or in the case of phone is lost. Facebook also promises a refund in the case of someone fraudulently gains access to users' account.

Facebook makes it clear that it will not share account information or financial data with anyone including third-party without users' consent. This also means data of Calibra wallet will not be used for targeted ads from Facebook.

"The limited cases where this data may be shared reflect our need to keep people safe, comply with the law and provide basic functionality to the people who use Calibra. Calibra will use Facebook data to comply with the law, secure customers' accounts, mitigate risk and prevent criminal activity," it added.