Executive Summary

On June 18, 2019, Facebook launched a new subsidiary named Calibra, whose first project is a digital wallet for a new global currency called Libra that is powered by blockchain technology but backed by real assets.

• The wallet will be available in Messenger, WhatsApp and as a standalone app. Its launch is expected in 2020.
• One of the motivations for Libra is that nearly half the adults in the world lack an active bank account – particularly in developing countries – and migrants spend $25 billion annually on remittance fees.
• Calibra promises the ability to send payments to nearly anyone or pay bills with a smartphone as easily as sending a text message at little or no cost. The platform also promises to offer strong security protections using the same verification and anti-fraud processes that banks and credit cards use, in addition to automated systems that will proactively monitor activity to detect and prevent fraudulent behavior, as well as protect user privacy.
• Facebook has signed up 27 companies to back the new cryptocurrency, including Visa, Mastercard, PayPal and Uber.
• Coresight’s take: The concept sounds intriguing and has received important validation from major financial institutions; however, Libra’s arrival remains “a long way from launch” according to COO Sheryl Sandberg, and Calibra faces regulator concerns as well as a skeptical public following consumer privacy concerns following the prior misuse of the company’s data.