What is Libra? Facebook’s cryptocurrency explained

TO horoscope lovers it's a star sign, but to Facebook, Libra is the name given to its expansion into e-commerce.

So what exactly is the tech giant's cryptocurrency project?

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What is Libra, Facebook’s cryptocurrency?

A few months ago, Facebook launched a new project dubbed Libra - its proposed digital coin.

The social networking giant said it wanted to create a separate, private currency system to allow users to make cross-border payments more easily.

As with other cryptocurrencies, people will be able to buy and sell libras on exchanges for traditional currencies.

Facebook said that its alternative currency paves the way for smoother transactions and payments online.

And, it's particularly aimed at those without credit cards or bank accounts.

Libra uses the same security and record-keeping principles as Bitcoin, the most popular digital currency system.

However, unlike Bitcoin, the project was initially backed by traditional financial companies, including PayPal, Visa and Mastercard, as the plan is to base its value on multiple real-world currencies, such as the US dollar and the euro.

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MASS EXODUS

But, much can happen in just a few months.

The firm's proposal to allow people to move money from their smartphone into a digital "wallet" was met with heavy criticism.

One cyber security expert branded the cryptocurrency "Facebook's most invasive and dangerous form of surveillance yet".

And even US President Donald Trump weighed in, tweeting after the project was announced: “I’m not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.

“Unregulated crypto assets can facilitate unlawful behaviour, including drug trade and other illegal activity.

“Similarly, Facebook’s Libra’s ‘virtual currency’ will have little standing or dependability.

“If Facebook and other companies want to become a bank, they must seek a new banking charter and become subject to all banking regulations, just like other banks.”

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Following warnings from politicians and regulators, from America to Europe, Facebook is now without the backing of any major payments firms for its project, due to launch by June 2020.

It's been rocked by defection after defection, with global payments backers Mastercard and Visa abandoning the project.

PayPal has also announced its departure.

EBay has similarly pulled the plug along with online travel company Booking Holding, the owner of Booking.com, Kayak and Priceline.

'NO GLOBAL PLAYER'

News agency Reuters points out that being dumped by so many major financial firms "means Facebook's Libra can no longer count on a global player to help consumers turn their currency into Libra, and facilitate transactions.

"This presents a new stumbling block for Libra's efforts to convince regulators and politicians about the coin's safety."

Also:

• France has pledged to block Libra from operating in Europe
• The Bank of England has laid out tough hurdles it must meet
• The US Federal Reserve wants concerns overcome

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