Facebook’s Libra cryptocurrency project remains under intense regulatory scrutiny. From issues concerning its potential as a tool to fund terrorism, to Facebook’s own terrible reputation with data, Libra is having everything thrown at it.
However, in trying to address the social media data scandals that have emanated from the large platform, Facebook has reiterated that the digital stablecoin currency and the financial information attached to it will be entirely separate from the social media user’s information.
This is certainly something that regulators would be happy to hear; whether they believe it or not will, of course, be an entirely different thing.
Christian Catalini, the head economist at Calibra, the Facebook subsidiary trying to launch this ambitious project, said right from the beginning that there was no intention for the cryptocurrency platform to profit from selling user data – rather funds would come from advertising.
“There will be measures in place, from encryption to access control, to ensure that [data] doesn’t get linked,” Catalini said during an interview for MIT’s Sloan School of Management. “From a Facebook perspective, I think the idea is to not use the data – to show more ads, to sell more ads. The Calibra wallet will have new features and we’ll build on those. And, that will be a new business model for the company, too.”
What is more, in trying to show its motives as being well-founded and innovative, rather than nefarious, Catalini has added that the Calibra wallet will not even be a necessity for the use of Libra, it will allow competing wallets to store the cryptocurrency.
What this means is that data privacy will actually become a selling point that Facebook can use in the promotion of this project – not something they have been able to do very much in the past.
Yet, even with these attempts to try and quell concerns, it appears as if Facebook is getting the brunt of the scrutiny based primarily on its past data indiscretions. Michael Cusumano, a professor of Management at MIT Sloan, even added that Libra is not all that revolutionary, and should not be too shocking.
“In China, the social media platform WeChat added WeChat Pay, and that’s been extraordinarily successful and actually the Facebook Libra model is at least in part influenced by the success of WeChat Pay,” Cusumano said