Because it possibly stands to faces billions of dollars in fines from the US Federal Trade Commission (FTC), Facebook, today announced its plans for Calibra, a Facebook subsidiary that will provide financial services and enable users to have access to and participate in the Libra network.
“Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost. And, in time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass,” the news release stated.
Intended to be officially released in 2020, the digital currency is powered by blockchain technology. However, not all responses to the news have been positive. The cryptocurrency is “a glorified exchange traded fund which uses blockchain buzzwords to neutralize the regulatory impact of coming to market without a licence as well as to veil the disproportionate influence of Facebook in what it hopes will eventually become a global digital reserve system,” according to the Financial Times.
While some remain weary, given Facebook’s recent track record of failing to protect consumer data, the company added that “Calibra will have strong protections in place to keep your money and your information safe. We’ll be using all the same verification and anti-fraud processes that banks and credit cards use, and we’ll have automated systems that will proactively monitor activity to detect and prevent fraudulent behavior.”
The idea that social and financial data could be combined is worrying, said Ray Walsh, digital privacy expert at ProPrivacy.
“Although Facebook claims that it will keep the distinct data sets at arm’s length – it is hard to believe that consumer habits will not be tracked in order to allow Facebook to better serve ads. After all, that is how the firm produces the majority of its revenue streams.
“Facebook has proven, time and time again, that it is not to be trusted with consumer data, and it seems unlikely that it does not plan to exploit as much consumer data as it is legally permitted to do so. Facebook’s whitepaper claims that it will not source transaction data from the Libra Blockchain without consumer consent. For the time being, no privacy policies or Terms of Service are available for Libra coin.”