Facebook proposes to launch its own cryptocurrency in the first half 2020. It is called Libra. A subsidiary called Calibra is also set up by Facebook to offer digital wallet to save, send and spend Libra. Calibra will be connected to Facebook Messenger and WhatsApp. Facebook has tied up with 28 partners in the project which include household names such as MasterCard, Visa, Spotify, PayPal, eBay, Uber and Vodafone as well as venture capital firms such as Andreessen Horowitz.

There are going to be transactions between consumers and business around the globe. The unbanked consumers will access financial services for the first time.

It is not clear how the regulatory authorities will deal with the largely unregulated world of cryptocurrency. Facebook hopes that it can bring global regulators to the table by publicising Libra.

Libra is going to be decentralised currency. The origin of cryptocurrency goes back to Austrian economist of the 19th century Fredrich Hayek.

Hayek was of the opinion that just as planning and management should not be centralised, the same way currency also should not be centrally controlled. What is currency after after all? It is a means of exchange recognised by the government. Currency is backed by a large institute, e.g. government, central bank etc. It is legal tender when backed by the government. Hayek was opposed to the central authority controlling the currency. He wrote a book on Denationalisation of Money. This concept could be translated into reality in this Internet age. Satoshi Nakamoto and blockchain thus brought Bitcoin. This happened in the last 10 years.

There are two distinguishing features of cryptocurrency — technology and decentralisation. In an ideal situation, any cryptocurrency is totally decentralised. That means it is not backed by any central authority. It is a trustless system. There is no institutional backing, but the trust is reposed in the system. In case of Bitcoins, the trust is in the blockchain technology.

Facebook’s Libra is different in the sense that by replacing the central authority, there is Facebook which may play a similar role. This fear is not misplaced. Facebook’s privacy policy is under attack. Unknowingly, Libra may empower Facebook to exert social control. Facebook is taking the first step to exert social control by introducing Libra into the digital payment world.

What AOL has done for Internet, Facebook might do for cryptocurrency. It may facilitate the use of cryptocurrency on a massive scale.