What Is Calibra? Facebook Reveals New Cryptocurrency That Will Let You Send Money Using WhatsApp, Messenger

Facebook has announced its plan to bring mobile payments to the masses, unveiling a new digital wallet that can be used to store cryptocurrency dubbed Libra.

After months of speculation, the social networking giant's media team said in a blog today that its digital wallet will be available in Messenger, WhatsApp and as a standalone app. The service, which runs on blockchain technology, is expected to launch for consumers in 2020.

"Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost," Facebook said.

"And, in time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass," the company added.

Calibra is a new subsidiary of Facebook that is solely designed to focus on financial services. The encrypted payments service, Facebook said, will soon be accessible to anyone with an entry-level smartphone which has data connectivity and will be available across the world.

The system's network is being built on technology from The Libra Association, a not-for-profit organization based in Switzerland. Members of the network include Mastercard, PayPal, Uber, Spotify and Visa. The group is structured to work independently from Facebook.

Those wanting to use the Calibra platform will be able to top up their account with U.S. dollars via some of the payment providers working as part of the Libra Association, then transfer money using the encrypted Libra network to contacts using Facebook's popular suite of chat apps.

"If you buy $50 of Libra, your $50 makes its way to the Libra Reserve," Calibra project lead David Marcus told CNBC. "It's designed to be stable and confer values on Libra that makes it more like a traditional currency than any of the digital currencies are now. This is the way paper money was created." Money can be sent between Calibra wallet to any other platform that accepts Libra. The aim is to have 100 companies and organizations on board before launch, Marcus said.

Users will need a government-issued ID to sign up to Calibra and data held on Facebook will, for the most part, be siloed from Facebook account information. The company said that it will offer users "automated systems that will proactively monitor activity" to detect fraud.

Facebook said today: "Aside from limited cases, Calibra will not share account information or financial data with Facebook or any third party without customer consent.

"This means Calibra customers' account information and financial data will not be used to improve ad targeting on the Facebook family of products. 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." It stressed that design of the system remains ongoing.

Until now, the firm has been quiet about its cryptocurrency plans. Speculation mounted last month that Facebook may soon make an announcement. At the time, social media commentator Matt Navarra told Newsweek it may face trouble due to its reputation on privacy issues.

"Facebook has the technical and financial resources to create a viable cryptocurrency, unlike many others who have tried or may want to try," he said. "The problem is trust. No-one has any in Facebook right now. Regulators, as much as users, will be super cautious about letting Zuckerberg's social powerhouse get its hands on their finances, and the data that comes with it."

Facebook seems well aware of that fact, stressing that it will be working alongside the Libra Association's founding members, not leading the charge. "The idea is [Libra] has mass adoption—lots of trusted companies that want to join the journey, so there's a chance of this becoming mainstream," Marcus told CNBC.

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In this photo illustration, a visual representation of a digital cryptocurrency coin sits on display in front of a Facebook logo on June 17, 2019 in Paris, France. Chesnot/Getty
What Is Calibra? Facebook Reveals New Cryptocurrency That Will Let You Send Money Using WhatsApp, Messenger | Tech & Science