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Tech Tent: Is Facebook the future of money?

Has Facebook’s plan for a brand new crypto-currency proved that the bitcoin believers have been proper all alongside? That’s just one of the big questions we are seeking to answer in this month’s Tech Tent podcast, a special edition all approximately the Libra coalition and its implications for the wider crypto-currency scene. For the past year, a small group at Facebook’s headquarters in California has been planning something large. On Tuesday, they went public.

The global became instructed that Libra, a brand new global currency for the internet, would make paying for matters or moving money throughout borders as easy and reasonably priced as sending a text message. The assertion changed into accompanied by an avalanche of white papers, shows, and Q&As from Facebook and its Libra coalition partners. But many questions were left unanswered. Is Libra really a crypto-currency? How could the coalition build a quick and efficient blockchain infrastructure whilst the technology has to this point proved bulky, electricity-hungry, and difficult to scale? And – crucially – who will make this foreign money safe and make sure it does now not comply with bitcoin in becoming a haven for crooks and terrorists?

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Today, we have answered this ultimate query in a BBC interview with the Bank of England governor. Mark Carney made it clear that vital banks have been determined no longer to sit returned and watch Libra show up. Mr. Carney, who met Mark Zuckerberg to be briefed about Libra a few months in the past, has given the plan a cautious welcome. He recognizes the need for innovation within the global payments gadget.

But there may be policies from the beginning: “Welcome to the arena of finance. There is an oversight, and there may be patron protection; there’s marketplace integrity – humans have certain rights to privateness that must be reputable. We’re no longer going to allow a community that comes into the area that could be a community for criminals and terrorists. Facebook makes a lot of the truth that there are 1.7 billion humans within the globe who do no longer have a financial institution account. They face excessive expenses and a cumbersome system once they need to send money to households far away.

A host of technology businesses have sought to deal with this difficulty these days. Among them is UK-based TransferWise. Its leader technology officer, Harsh Sinha, tells us Facebook’s access into this market is welcome.
“We took an approach of connecting without delay into neighborhood banking systems across the world,” he tells us.
“Facebook’s coming at it from an exclusive angle and trying to use blockchain technology. It’s an exciting angle – and I suppose time will inform how matters progress.

He says there may be a huge marketplace to aim at, with room for lots of various processes. But growing a brand new superfast blockchain and making sure the brand new system complies with policies on cash laundering and terrorist financing will be a prolonged and pricey process.

In the doldrums

The wider cryptocurrency community is watching with interest. Until lately, bitcoin has been in the doldrums, soaring around the $3,000 (£2, three hundred) mark after falling from a top of almost $20,000. But within the closing month, it has soared above $nine 000 as rumors swirled approximately Facebook’s forthcoming arrival on the scene.

Crypto-forex and blockchain marketing consultant Kate Baucherel said there was an expectation that Amazon or Apple, or a few different tech massive, may take the plunge into crypto-foreign money. She stated Facebook’s move felt like “a real paradigm shift within the panorama.

She admits that Libra – which is managed via a crucial business enterprise – is a completely distinct creature from the decentralized, open, impartial bitcoin. But she says there is a sustained upward push inside the use of crypto-currencies and in the application of blockchain generation, and Libra can most effectively fortify that trend.
We invited Facebook to see this week’s program; however, the business enterprise directed us as a substitute to its companions inside the Libra coalition.

The social media giant is all too aware that its recent records and privateness scandals suggest triumphing accept as true within its ambitious currency plan could be tough. Its strategy seems to be to permit others to do the talking.
But with US politicians already calling for a pause within the mission, it no longer seems to be running.

Deborah Williams
Snowboarder, foodie, ukulelist, vintage furniture lover and identity designer. Making at the intersection of minimalism and mathematics to create strong, lasting and remarkable design. I work with Fortune 500 companies and startups. Award-winning beer geek. Twitter fan. Social media scholar. Incurable travel advocate. Alcohol expert.