PayPal, for example, charges a three percent transaction fee, which takes a substantial cut out of businesses and freelancers who use their payment service for the majority of their transactions. Unless PayPal and its peers lower their fees in response to the new competition from Facebook, they could end up losing substantial market share.
Facebook says that Calibra customers' account information and financial data will not be used to improve ad targeting on the Facebook family of products and only in limited cases will information be shared to reflect our need to keep people safe, comply with the law and provide basic functionality to the people who use Calibra.
U.S. regulations may represent another hurdle for Facebook. The SEC has shut down about a dozen businesses issuing their own tokens for violations of securities law. Facebook has been in contact with the SEC, but it hasn't received a "no-action" letter from the SEC yet. That would have safeguarded the project from regulatory action by the agency.
A digital challenger with the clout of Big Tech is the stuff of nightmares for the old guard of finance. Facebook says that money transfers with Libra will be fast and cheap. That would undercut banks' transaction fees, especially internationally.
Some are comparing Facebook's Libra Reserve scheme to the IMF's Special Drawing Right (SDR) system. This makes sense. It's based on a basket of currencies just like Libra intends to be when it is launched next year. But the truth is Libra is anything but an SDR system.
Talk of decentralised structures is everywhere in the introductory material, but for now the system only aspires to achieve decentralisation at some point in the future. Libra Blockchain will be coming to market in fully permissioned form, effectively centrally controlled by the founder Libra coin holders.
In addition to Libra, the project will also issue a "Libra investment token" that will be sold only to the founding corporate members of the Libra Association, and accredited investors. Excess interest earned on the portfolio backing outstanding Libra collateral will go to holders of the investment tokens.
Facebook has built a dedicated computer programming language called "Move" to provide more flexibility to the Libra blockchain. By building programmability into the blockchain, it can take advantage of new functionality or new techniques, without an entire network upgrade.
Among the payments giants, a number of NGOs are involved in the Libra Association, including Creative Destruction Lab, Kiva, Mercy Corps and Women's World Banking. To become a "Social Impact Partner," participating non-profits must have a five-year track record of poverty alleviation work, including digital financial inclusion initiatives in the field, and an operating budget of greater than $50 million.
Third parties will be able to build their own apps, wallets, and marketplaces around Libra. If you want to, though, you can use Facebook's digital wallet, Calibra, a regulated subsidiary. In the US, Calibra is registered as a money service business, and will be overseen by the US Treasury.
Libra is nothing more than a brazen attempt to override national monetary sovereignty by creating a global-scale Fed equivalent - within which Facebook's dominance is veiled by the cunning use of buzzwords like blockchain, DLT, decentralisation and cryptocurrency.
Because Facebook owns Calibra and also has a seat on the Libra Association, it will be the only entity on the currently 29-member board that will effectively have two votes. But the governing structure of the Libra Association is still evolving.
Calibra is how Facebook intends to make money off Libra. More generally, it's a massive play for Facebook to get into financial services in a way that no other technology company may be able to compete with.
The overstatement of trading volumes by cryptocurrency exchanges, and by implication the understatement of the importance of listed futures, suggests that market structure has likely changed considerably since the previous spike in Bitcoin prices in end-2017 with a greater influence from institutional investors.
The MAS (the Monetary Authority of Singapore), BOE (Bank of England) and FCA (Financial Conduct Authority) have announced they will be working together to strengthen cyber security in their financial sectors.
Researchers from Adobe and UC Berkeley have created a tool that uses machine learning to automatically identify when photos of people's faces have been altered.
This paper analyzes the white papers of the fifty top-grossing ICOs of 2017, how the software code controlling the projects' ICOs reflected their disclosures. Most promised forms of investor protection that the code did not deliver and 12 allowed modifications to the way the smart contract worked, but only four of them disclosed that ability.
This article details how CBDC can be implemented, comparing three possible DLT-based options (Corda, Hyperledger Fabric, and Quorum) on privacy, scalability/performance, resiliency and finality.