Facebook to launch controversial cryptocurrency by 2020

MENLO PARK, CALIFORNIA — The social network is coming out with a Bitcoin-style cryptocurrency, and let's just say not everyone is on board.

Facebook on Tuesday announced plans to launch its own cryptocurrency in 2020. The digital currency, called Libra, is backed by a reserve of financial assets, making it less volatile than other cryptocurrencies such as Bitcoin.

The social giant won't have direct control over Libra. Instead, it will be serviced by the Libra Association, an independent nonprofit headquartered in Switzerland. Its founding members include companies like Uber, Visa, MasterCard, and PayPal, among others."

"The association's main functions are to validate transactions on the Libra blockchain, and manage the reserve the digital currency is tied to.

A digital wallet for the new cryptocurrency, called Calibra, is also being launched, and will be available on Messenger, WhatsApp, and as a standalone app.

Calibra will allow users to send Libra to anyone with a smartphone, and in the future may be used to pay for purchases on the app or to various vendors for day-to-day transactions.

According to Facebook, the Libra blockchain is pseudonymous, allowing users to hold more than one address not linked to their real-world identity.

It claims financial data on Libra transactions will be kept separate from user ad profiles, and that Calibra account information will not be used to improve ad targeting on Facebook-owned platforms.

With Facebook's track record thus far, it's understandable that more than a few are wary of this new venture.

CNBC reports that Democratic Rep. Maxine Waters said in a statement that the company is "continuing its unchecked expansion and extending its reach into the lives of its users."

Citing a lack of regulatory framework for cryptocurrency, she has requested the company pause work on Libra until Congress and regulators can examine the issues and take action.