Originally published in La Republica.
“Colombian regulation should allow exchange of Libra, that will be well backed, thus allowing its use as a means of payment”
Facebook, the social media giant with 2.3 billion monthly active users, is expanding its business by venturing into e-commerce and cryptoassets. In the first half of 2020, Facebook plans to launch Libra, a digital currency managed by the Libra Association, a Geneva-based organization comprising 28 companies from sectors like technology, finance, and telecommunications, including Mastercard, PayPal, Visa, and Uber. Unlike other cryptocurrencies, Libra will be backed by low-volatility assets such as bank deposits and government securities, aiming to rival traditional currencies like the dollar and gold.
Facebook created Calibra, a subsidiary offering digital wallets for saving, transferring, and spending Libra. Users of Facebook Messenger and WhatsApp will also be able to use Libra, potentially increasing accessibility and financial inclusion, especially in developing countries where traditional banking is limited. Experts like Juan Pryor, Mauricio Tovar of the Blockchain Foundation see Libra as a positive development, addressing inefficiencies in digital transactions and offering low-cost international transfers. However, challenges remain, including regulatory uncertainties and concerns over Facebook’s privacy practices. Critics like Alex Preukschat question how Facebook will monetize Libra and ensure data separation between social and financial information. Additionally, major banks and retailers remain cautious, awaiting clearer regulatory frameworks. Despite its potential, Libra faces skepticism and unresolved questions about its implementation and impact.