News Flash: Facebook sets out Safeguards for new Digital Currency

Applicants for Facebook’s forthcoming mobile wallet will need government-backed ID

To use Facebook’s planned mobile wallet, Calibra, individuals will need to submit government-authorised identification during the registration process to reduce the risk of money laundering and fraud, according to an article in the Financial Times. A smartphone app, Calibra is designed to hold Libra, a digital currency being developed by Facebook with the support of PayPal, MasterCard, Visa, Spotify, Uber and about 20 other companies, including telecoms operators Vodafone and Iliad.

Kevin Weil, head of product at Calibra, told the FT that Calibra will not share account information or financial data with Facebook or any third party without customer consent, and that user data will not be used for targeting adverts. However, he acknowledged that, in the longer term, users’ financial data could be used to help Calibra sell other financial products to users. Although Facebook’s messaging services, WhatsApp and Messenger, will be aware that an individual is using Calibra, they will not be able to see transaction information, Weil added.

Underpinned by a distributed ledger system (a blockchain), Libra is designed to enable people to store, spend and transfer money across international borders with minimal transaction fees.  Calibra executives say the new currency will also support very small online payments, potentially paving the way for new business models in the digital content market. Facebook envisions a Geneva-based non-profit foundation, comprised of 100 private sector and civil society members with equal voting rights, will launch Libra in the first half of 2020, according to the FT.

For more information, please see the Financial Times report