Facebook launches cryptocurrency in bid to shake up global finance

Facebook has announced a digital currency called Libra that will allow its billions of users to make financial transactions(金融交易) across the globe, in a move that could potentially shake up the world’s banking system.

Libra is being touted (被吹捧为...) as a means to connect people who do not have access to traditional banking platforms. With close to 2.4 billion people using Facebook each month, Libra could be a financial game changer(金融游戏的改变者), but will face close scrutiny(详细审查) as Facebook continues to reel from(受…的不好影响) a series of privacy scandals(隐私丑闻).

Libra could be a welcome lift to Facebook’s profits: analysts are suggesting Libra could be a huge moneymaker for Facebook, arriving as its growth slows.

Technology to make transactions with Libra will be available as a standalone app(独立的应用程序) – as well as on WhatsApp and Facebook Messenger platforms – as early as 2020. It will allow consumers to send money to each other as well as potentially pay for goods and services using the Facebook-backed digital currency(Facebook支持的数字货币) instead of their local currency.

But with the company in the crosshairs over multiple privacy violations(侵犯隐私), the move is already attracting scrutiny from financial regulators and privacy advocates(金融监管者和隐私倡导者) across the world. Facebook is currently facing a potential $5bn (£4bn) fine from the US Federal Trade Commission (FTC)(联邦贸易委员会), which opened an investigation in response to the Cambridge Analytica revelations first reported by the Guardian and Observer.

US and UK officials have previously expressed concern about Facebook’s move into the financial sector. In May, members of the US Senate committee on banking, housing, and urban affairs (美国参议院银行、住房和城市事务委员会) wrote to Mark Zuckerberg, the Facebook CEO, asking him to answer questions on privacy concerns and financial regulation.

“It is important to understand how large social platforms make data available that can be used in ways that have big implications for consumers’ financial lives,” the letter said. “It is also important to understand how large social platforms use financial data to profile and target consumers.”

Facebook executives claim the Libra system will help the many millions of people without bank accounts but with access to mobile phones to enter the banking world and to more seamlessly send money.

While Facebook created the currency, decisions regarding the ongoing maintenance of the Libra platform will be carried out by the Libra Association(Libra协会), a collective of dozens of financial, not-for-profit companies(非营利公司), and commerce firms(商业公司). To join the new Facebook subsidiary(子公司), each of these companies contributed a minimum of $10m to the venture, giving the company more than $1bn to put towards the new currency.

Companies involved include Mastercard, PayPal, the crypto exchange Coinbase, and eBay. Also joining the Libra Association are the ride-hailing startups Uber and Lyft and non-profit financial organisations Women’s World Banking, micro-loan platform(小额贷款平台) Kiva, and humanitarian aid group(人道援助组织) Mercy Corps. The foundation will be headquartered in Geneva and Facebook claims it will be independent from governments and the company itself.

In a document outlining how the new cryptocurrency will work, Facebook said its goal is to foster more access to “better, cheaper, and open financial services”. Unlike bitcoin and other cryptocurrencies, Libra is tied to a mix of global assets to prevent the level of volatility common in the digital currency space(防止数字货币空间常见的波动性). Facebook built the currency on its own blockchain technology – the encrypted technology(加密技术) used by bitcoin and other cryptocurrencies – in order to scale to more users more quickly.

Traditionally with cryptocurrency, the network can be run and secured by anyone with a computer access. But initially, Libra’s blockchain will be closed, and only a select number of people will be able to run the software that powers it and verify transactions.

The company has been quietly padding its staff with ex-PayPal executivesand crypto experts for years, and its entry into the digital currency space threatens to potentially upset traditional banking institutions(颠覆传统银行机构). Facebook claims it aims to supplement existing institutions and allow users who may have access to mobile devices but not bank accounts to enter the banking ecosystem(银行生态系统), citing its partnerships with Women’s World Banking and other non-profits.

“These kinds of groups will help us improve on the mission of financial inclusion(金融包容的使命) – in the long term this project will be seen as a financial utility(金融设施),” said Kevin Weel, vice-president of product at Facebook. “This has no intention of substituting itself for the large central banks.”(这不打算取代大型央行)

The platform will roll out(推出) over the next year with the goal of users being able to send money on it by 2020. Cryptocurrency advocates(加密货币倡导者) say a company as large as Facebook entering the space is a huge gain for adoption of the technology. Bitcoin entered the world more than 10 years ago, but very few people use it on a daily basis, said Jerry Brito, the executive director at Coin Center, a Washington DC not-for-profit cryptocurrency advocacy group.（华盛顿直流电外盈利加密货币倡导组织）

The company faces a number of potential regulatory roadblocks(潜在的监管障碍) before it can reach consumers. In April 2019, Zuckerberg met the Bank of England governor(英格兰银行行长), Mark Carney, and the US Treasury to discuss the payment system and potential regulation surrounding it.

The company claims it will not attempt to bypass existing regulation(不会试图绕过现有法规) but instead “innovate” on regulatory fronts(在监管方面“创新”). Libra will use the same verification and anti-fraud processes(反欺诈程序) that banks and credit cards use and will implement automated systems to detect fraud, Facebook said in its launch. It also promised to give refunds to any users who are hacked or have Libra stolen from their digital wallets.

Facebook claims financial transactions will remain siloed from social media activity and that user ad profiles will not be based on Libra habits, but critics say the new project has a number of privacy implications.(隐私问题)

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