According to a leaked report from the Wall Street Journal last week, Spotify had signed on to support Facebook’s cryptocurrency project.
Over two dozen other companies were rumored to be supporting the cryptocurrency, dubbed the ‘Libra.’ Each company would invest around $10 million as part of a consortium.
Now, as expected, the social media company has confirmed the project.
The consortium – known as the Libra Association – will govern the digital coin, ensuring it remains viable and profitable. Facebook recruited the backers last month to fund the crypto-based payments system.
Officially introducing the Libra — and the Calibra.
Facebook has formally introduced its new global subsidiary – the Calibra. The goal of the company is to provide financial services, allowing its 2.4 billion users and others to access and participate in the Libra network.
Launching a separate website for the new cryptocurrency, the social media company explained the purpose of the Libra.
“A simple global currency and financial infrastructure that empowers billions of people.
“Reinvent money. Transform the global economy. So people everywhere can live better lives.”
According to Facebook, people have a difficult time saving, sending, and spending money online. For people in developing countries, nearly half lack an active bank account.
“The cost of that exclusion is high — approximately 70% of small businesses in developing countries lack access to credit, and $25 billion is lost by migrants every year through remittance fees.”
Calibra, the new digital wallet for the Libra, will purportedly help users save, send, and spend money. Using a smartphone, people can send the Libra “to almost anyone” with a smartphone with a simple text message. Partnering with over two dozen companies, Facebook wants people to pay bills “with the push of a single button,” buy a cup of coffee with a quick code scan, and even ride local public transportation “without needing to carry cash or a metro pass.”
Calibra will purportedly launch with strong protections and safeguards to keep users’ information and wallets safe. Dismissing past privacy breaches and high-profile leaks by the company, Facebook vows to never share personal account information or financial data to third parties “without consent.”
Of course, the social media company says these goals could change at any time.
So, why did Spotify sign on as a backer?
Publishing its own blog post, Spotify explained the reason for joining the Libra Association.
According to the music streaming company, executives have worked to create a platform where fans can directly access the audio they want “at any time, anywhere, and at the right price.” They also want to offer a service with economic viability.
The Libra Association, an independent, non-profit organization, was founded to create a single global currency and the financial infrastructure to “empower” billions of people around the globe.
The company writes,
“Libra offers [a] massive opportunity for simple, convenient, and safe payment over the internet (particularly for the 1.7 billion adults worldwide without access to mobile money, a bank account, or a payment card). We’ve seen this directly in many of the developing markets where we operate.”
Plugging the new cryptocurrency, Alex Norström, Spotify’s Chief Premium Business Officer, concludes,
“One challenge for Spotify and its users around the world has been the lack of easily accessible payment systems – especially for those in financially underserved markets. This creates an enormous barrier to the bonds we work to foster between creators and their fans.
“In joining the Libra Association, there’s an opportunity to better reach Spotify’s total addressable market, eliminate friction, and enable payments in mass scale.”
Facebook hopes to launch the new cryptocurrency next year.
Featured image by Facebook.