Binance Research: Facebook’s Libra Could Spark Additional Cryptocurrency Volume

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"The cost of that exclusion is high - for example, approximately 70 percent of small businesses in developing countries lack access to credit, and $25 billion is lost by migrants every year through remittance fees". This coin-storing code will be available initially in WhatsApp and Messenger and as a standalone app for Android and iOS next year, the Silicon Valley goliath says.

The technical underpinnings of Libra are similar to that of Bitcoin, with both digital currencies relying in blockchain technology to track and verify payments.

The lines between Facebook and Calibra will be blurred from the start. "Tencent's WeChat, the giant social network in China, already has a digital wallet", NPR's Aarti Shahani reports. "The largest user base is India". Facebook's founder - Mark Zuckerberg - has remained tight-lipped about the project, which will deliver a powerful new revenue stream to the embattled company now facing a potential federal antitrust investigation as well as privacy policy probes. Unlike most cryptocurrencies now out there, Facebook's Libra will be backed by a reserve of real assets, which means its value will remain largely stable. It's not pegged to a single currency, however, so its value with regard to other currencies will fluctuate, a fact that will invite ruthless currency arbitrage.

"This instrument for transactions will allow Facebook to collect millions and millions of data, which strengthens my conviction that there is a need to regulate the digital giants", said French Finance Minister Bruno Le Maire in an interview on Europe 1 radio. Earlier this year, United Kingdom lawmakers said the company behaved like "digital gangsters". Calibra, the company behind the financial service, is meant to address this problem since it will allow those who don't have a bank account to save, send and spend Libra.

Facebook, which has had its share of issues with protecting user data on its platform, said in a news release that "w$3 hen it launches, Calibra will have strong protections in place to keep your money and your information safe".

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

The new digital currency could also open up new markets to media companies.

"Libra is a global, digitally native, reserve-backed cryptocurrency built on the foundation of blockchain technology", the company wrote on a new website dedicated to the rollout.

Company officials emphasized Libra as a way of sending money across borders without incurring significant fees, such as those charged by Western Union and other worldwide money-transfer services. Like all of Libra's founding members, Facebook will get only one vote in its governing association.

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