Bitcoin crossed $13000 and this fueled a positive sentiment throughout the crypto space. On decoding the bull run we found that Facebook’s announcement of Libra coin, its 20+ partners firms, and the excitement over the Calibra wallet set the bull raging to the moon. It reinstated the faith of crypto traders waiting for another bull run by the end of 2019.
Facebook Announced Calibra – a digital wallet
After announcing the revolutionary currency ‘Libra Coin’, Facebook shared plans for Calibra, a newly formed subsidiary to provide financial services to participants in the Libra network. Naturally, there was speculation around Facebook exercising control over the Libra network and the announcement of Calibra as an entity separate from Facebook has dispelled most of the fear. Calibra will introduce a digital wallet for Libra and it is slated to be available in Messenger, Whatsapp and on the Libra app with a target launch in 2020.
What problem does Calibra solve?
Calibra aims to solve the challenge of reaching the unbanked and underbanked through their already huge network of social users because basic financial and banking services are still out of reach to most citizens of underdeveloped and third world countries. Nearly 70% of small businesses in these countries suffer due to lack of available credit and high remittance fees. Calibra digital wallet will make credit and outward remittance available to these users through WhatsApp, Messenger and their stand alone Calibra app on iOS and Android.
Just like existing payment solutions, in time Calibra will also offer services like bill pay, retail spending and buying local bus and train tickets. In order to stay within regulations, Facebook will require users of the Calibra app to complete their Know Your Customer (KYC) formalities.
Apart from retail users, Calibra digital wallet will also accept payment from institutional and corporate users. Currently Calibra only supports P2P payments using internet. In-store and POS payments will also be introduced in the future.
How safe is Calibra?
Calibra has a fraud detection feature, thus making it easy to catch fraudulent transactions. In crypto, anonymous transactions are supported, but Calibra is taking a slightly different approach because it’s being hailed as a “stablecoin”, KYC means your account is associated to your government-issued ID.
For anomalies, there is a dedicated customer support service to handle the issues and allow users to report fraudulent activities using in-app reporting system. Calibra also claims that customer data will not be shared with Facebook or any third-party without the consumer’s consent. Facebook has always had a loose interpretation of user content and privacy and this would be a challenge.
What will happen to Whatsapp Pay?
Whatsapp Pay used UPI in India and this solved a big problem of P2P payments. Facebook’s Libra does not include India for the time being due to regulatory uncertainty. A panel headed by India’s Economic Affairs secretary, Subhash Chandra Garg has reportedly proposed a 10-year-long prison term for those who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies.” It is yet to be seen if Facebook’s Libra and Calibra wallet will change their mind.
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