Facebook’s Proposed Form of Digital Currency: How Will Libra Impact Consumers?


Scott Reynolds, Consolidated News Photos

While still largely under allegations against user security, Mark Zuckerburg and Facebook intend to create a new form of digital currency called Libra.

Matthew Horan, Reporting Journalist

After recently being under fire for questions concerning censorship and advertising discrimination, Mark Zuckerburg and Facebook intend to create a new form of digital currency called Libra. Many people are concerned with the economic complications of Libra and how it would impact day-to-day transactions. With all the negative media Facebook has been receiving recently, others are unsure what to think of such a large scale business operation coming from the social media source.

Some main Libra questions that are being raised by consumers go along the lines of user protection as well as liabilities around money-laundering.

Libra itself is much more than just a money transferring scheme; it will offer multiple financial services to the public. The system will have a vast network of exchangers, digital identity providers, and asset managers among other contributors. The qualifications of such people seem to be unknown at this time considering Facebook has yet to release reports with data pertaining to these kinds of workers. With so many financial networks and services to offer, one of the main problems already emerging from the system is a lack of supervision amongst the different systems. Since Libra is going to be expanding the market for digital currency beyond basic peer-to-peer transactions, this opens up a lot more dark corners within the online market.

The Libra Association as a whole plans to run as a privately run central bank. This, however, enables the increase of illicit trafficking within the online illegal market. All of this privately-issued money going into the financial system doesn’t have any connections to the real economy. Libra would be able to use many core banking powers without being tied to public responsibilities and other framework like the Federal Reserve.

It is still unknown to the public as to which dealers have the right to purchase first hand Libra coins from the Association itself. The different markups amongst dealers trying to create profit could potentially destroy the chances of Libra’s base price of being secure. Accessibility and pricing for certain items could very much be maintained by a series of rewards points for each customer, as determined by Facebook.