Facebook wants to be your bank with its new Libra cryptocurrency

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  • Facebook has confirmed plans to create its own digital currency, called Libra, and it has some big-money backers.
  • Canada faces huge challenges in closing the gap between its emissions and its climate change targets, a CBC News analysis shows.
  • Missed The National last night? Watch it here.

Banking on Facebook

Facebook isn’t content with your family photos and cat videos. Now it wants to be your global bank, too.

Today the Silicon Valley giant confirmed plans to start its own digital currency, called Libra, and create technology to allow it to be used for transactions on its platforms as soon as next year.

The company is spinning the move as a plus for the estimated 1.7 billion people around the world who don’t have a bank account, but may have access to a mobile phone or computer. The cryptocurrency will enable them to pay for goods or transfer money online across borders without such high exchange or transaction fees.

“Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people,” David Marcus, the former PayPal executive who is spearheading the project, wrote on Twitter. “Our hope is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have.”

Facebook says Libra will allow people to do transactions and exchange money both on and outside the company’s online platforms. (Dado Ruvic/Reuters)

Of course, it will also be good for Facebook’s bottom line if can tap into new markets — as well as the billions who already use its social networking site and associated apps like Instagram, Messenger and WhatsApp each month — to gather even more consumer information to monetize.

Unlike many existing cryptocurrencies, Libra will be what is known as a “stablecoin” — a digital cryptocurrency that is backed with real world assets like the U.S. dollar or government securities. It’s a move that should make it less volatile, and therefore better suited for business and banking.

Facebook has recruited some big name partners for the collective that will administer Libra, including Mastercard, PayPal, Visa, Uber, and Spotify, as well as non-profits like Women’s World Banking and the microlending site Kiva. Each has invested a minimum of $10 million US in the currency, and Facebook hopes to have 100 “founders” and more than a billion in the bank by launch.

Mark Zuckerberg and other Facebook executives have already had discussions with regulators in the U.K., U.S. and Switzerland to fill them in on the plan, which includes the type of anti-fraud, verification and compliance checks already in use by banks and credit card companies.

All-in-all, a far-cry from the anonymous and encrypted appeal of the first generation of cryptocurrencies like Bitcoin.

This image provided by Calibra shows what its digital wallet app might look like. (Calibra via AP)

Libra won’t be the first “stablecoin,” but it promises to be the largest. And given how much money is being made in the digital currency market — Bitcoin is back trading above $9,000 US and is outperforming oil, gold and the S&P 500 stock index — it was probably inevitable that big corporations would seek an in.

But the question will be whether Facebook should be allowed a whole new sort of influence over people’s lives.

The company is already facing as much as $5 billion in fines from the U.S. Federal Trade Commission for sharing user data with election-tilting firms like Cambridge Analytica. And millions more in penalties are likely to be levied by European regulators for violations of the EU’s tough new privacy laws.

Today alone, a parliamentary committee in the U.K. heard testimony that Facebook rejected technology that could have easily blocked millions of hate speech posts, while the Canadian and Ontario human rights commissions have written letters expressing concerns about discriminatory job ads on the platform.

Facebook is entering a market already crowded with alternative cryptocurrencies.

Facebook is promising that Libra will be different. It says Calibra, the new subsidiary that will operate the digital wallets that save and spend the coins, will only share data with its parent and other companies if it has consent, or for public safety and law enforcement purposes.

And the cryptocurrency already appears to be making progress towards its goal of bringing the world together.

Tyler and Cameron Winklevoss, the twins who accused Zuckerberg of stealing their idea for a social networking site while they were all students at Harvard, later settling for $65 million, are big believers in stablecoins.

So much so, that they have held discussions with Facebook about Libra and now appear willing to end a 15-year feud.

“There’s so much pie to grow, I mean, at this point we need to be frenemies,” Cameron told CBS Sunday Morning this past weekend.

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Confronting carbon

Canada faces big challenges in closing the gap between its emissions and its climate change targets, writes data journalist Inayat Singh.

What’s the best way to reduce Canada’s greenhouse-gas emissions?

The federal government has a few ideas in its climate strategy, which uses a carbon pricing plan as its centrepiece. But by the government’s own projections, Canada is going to miss the emissions reduction target it has set for itself for 2030.

So what would help bridge the gap?

Prime Minster Justin Trudeau speaks at a Liberal Climate Action Rally in Toronto on March 4. Government projections say the country is not on track to meet its emissions-reduction goals. (Mark Blinch/Reuters)

CBC News asked Navius Research, a climate modelling company, to project the effects of some commonly discussed government policies on Canada’s future emissions.

The result? The policies everyone talks about, including the much-debated carbon tax, are not going to get Canada to its emissions goal on their own.

We asked Navius to try out three ideas on top of current federal and provincial climate-change plans: continuing to increase the carbon tax to $130 per tonne by 2030 (up from its current maximum of $50 by 2022), removing  fossil fuels from our electricity generation system, and requiring all new cars sold to be electric by 2030.

Put together, we got closer to Canada’s target, but still missed it.

The takeaway? We need to be looking at policies that affect a wider range of emissions from the oil and gas sector, buildings, transportation and other industries.

“There’s always a challenge with policy, because most people think about the types of emissions that they themselves produce,” said Jotham Peters, senior partner at Navius Research. “But a lot of people don’t think about all the emissions that might originate from something else that they don’t think about on a regular basis.”

Tonight on The National, we’ll look at what’s working, what’s not, and the measures it would take for Canada to meet the targets it committed to in the Paris Agreement.

– Inayat Singh

This story is part of the CBC News series In Our Backyard, which looks at the effects of climate change in Canada, from extreme weather events to how it’s reshaping our economy:

Quote of the moment

“The data from Boaty McBoatface gave us a completely new way of looking at the deep ocean  the path taken by Boaty created a spatial view of the turbulence near the seafloor.”

– Eleanor Frajka-Williams, of the U.K.’s National Oceanography Centre, explains how an internet-named unmanned sub has made a significant climate change discovery in Antarctic waters.

Boris Johnson stands next to Boaty McBoatface, an autonomous underwater vehicle (AUV) used for scientific research, on a visit to the U.K.’s National Oceanography Centre on June 22, 2018 in Southampton, England. (Matt Cardy/Getty Images)

What The National is reading

  • Canadian corporations dodged up to $11 billion in taxes in a year, says CRA (CBC)
  • Iran will not wage war against any nation, says president (Guardian)
  • UN slammed for “systemic and structural failures” in Myanmar’s Rohingya crisis (CBC)
  • More than 300,000 flee Congo violence, complicating Ebola fight (Reuters)
  • Hexo, Molson will start selling pot drinks by December (Bloomberg)
  • Blind man files $1.25M suit against realtor who allegedly “tricked” him into selling home (CBC)
  • Revealed: steamy secrets that kept Rome in hot water (The Times)
  • Man ordered to pay Nigel Farage £350 for hurling milkshake at him (Sky News)
  • Accidental cat filter derails political press conference (CNN)

Today in history

June 18, 1984: Behind the scenes at the 1984 Liberal leadership convention

The Journal pulls back the curtain on the Liberal convention that unleashed Turnermania on the nation. “I’ve got my share of heart. I’ve got my share of mind. I am what I am,” John Turner tells one of his advisors, channelling his inner Popeye. Bonus footage of Eugene Whelan’s hat.

A behind-the-scenes look at the drama and bitterness behind John Turner’s win at the 1984 Liberal leadership convention. 21:09

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