MENLO PARK (CBS / AP) — Facebook is unveiling plans to create a new digital currency similar to Bitcoin for global use, one that could drive more e-commerce on the Menlo Park-based company’s services and boost ads on its platforms.
The digital currency, called Libra, is scheduled to launch sometime in the next six to 12 months. Facebook is taking the lead on building Libra and its underlying technology; its more than two dozen partners — including PayPal, Uber, Spotify, Visa and Mastercard — will help fund, build and govern the system. Facebook hopes to raise as much as $1 billion from existing and future partners to support the effort.READ MORE: Fire Destroys Abandoned Building In San Jose Alviso Area
Creating its own globe-spanning currency — one that could conceivably threaten banks, national currencies and the privacy of users — isn’t likely to dampen regulators’ interest in the social media giant. Facebook is currently under federal investigation over its privacy practices, and along with other technology giants also faces a new antitrust probe in Congress.
David Marcus, who is heading Facebook’s cryptocurrency operation, tweeted on Tuesday that Libra is in part aimed at “the 1.7 billion people who are still unbanked 30 years after the invention of the web.”
“When you buy–I want to call them ‘Zuck Bucks’–but, actually of course, they are called Libra. When you buy one of these, they keep the money for you. So you buy it with 10 bucks and they store 10 bucks, and the place where they make money is they keep the interest of it. So, they’ve kept the interest on it and pretty soon that adds up,” said Danny O’Brien of the Electronic Frontier Foundation.
With six billion Facebook users worldwide, the potential is seemingly limitless.READ MORE: Oakland City Council Votes to Defund Police, Stripping More Than $17M from Department Budget
“Facebook is attempting, I guess, to be what PayPal was originally intended to be, which is something that is the equivalent of digital cash,” O’Brien told KPIX 5.
He believes regulation, something the social media giant hasn’t faced, could come in from all angles.
“Not just the FTC, but the SEC, Congress, the banks themselves, the people who’ve been not part of this partnership might have a few questions. They have to deal with a lot of red tape. So, why is Facebook not dealing with that?”
The French government is already asking questions, as is the Senate banking committee.
“Ultimately it still relies on you trusting Facebook and I think that’s a step that for many people is a step too far. They’ve been burnt in the past, so they’re a little skeptical,” O’Brien said.MORE NEWS: 165 Pounds Of Fireworks Seized, Man Arrested In Oakland Crackdown
© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. KPIX 5 reporter Andria Borba and The Associated Press contributed to this report.