Facebook CEO and cofounder Mark Zuckerberg.
- Facebook has announced a new cryptocurrency, Libra, and set up a digital wallet subsidiary called Calibra to let people spend and save the currency.
- Facebook CEO Mark Zuckerberg has promised that Calibra will not put peoples' money or privacy at risk, and that transaction data would not be shared with Facebook.
- This isn't strictly true if you read Calibra's terms and conditions, which state Facebook may use some data to prevent crime and improve products.
- Facebook will also share some anonymised aggregated information with Calibra, according to the terms, to study things like internet adoption.
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Facebook CEO Mark Zuckerberg has personally promised that his company's proposed new digital wallet, Calibra, and Libra cryptocurrency will not put peoples' money or privacy at risk.
The chief executive's pledge comes after the social network approaches two years of near-endless privacy and governance scandals, including the Cambridge Analytica data breach, playing a prominent role in electoral disinformation, and the exposure of its data-sharing agreements with Chinese phone makers.
Facebook announced its new cryptocurrency Libra and an accompanying payment service provider called Calibra on Tuesday. Calibra is a Facebook subsidiary that will begin by offering a digital wallet app that will also integrate with WhatsApp and Facebook Messenger, but will eventually branch out into other services.
What spending and receiving Libra may look like.
Libra, meanwhile, is the new cryptocurrency billed as a collaborative effort rather than a Facebook-owned project. Facebook on Tuesday announced investment partners such as Spotify and eBay who will help keep the currency afloat and govern it.
Facebook's tendency to hoover up and use user data in unexpected ways raises questions about whether people's transaction history on Calibra will be truly kept separate from Facebook's other services, namely the core blue app, Instagram, and WhatsApp.
Zuckerberg wrote in a Facebook post that Calibra will be regulated just like any other payment provider and that "any information you share with Calibra will be kept separate from information you share on Facebook."
Zuckerberg added that Libra and Calibra were an important plank in Facebook's move towards being a privacy-focused social network. He wrote:
"This is an important part of our vision for a privacy-focused social platform - where you can interact in all the ways you'd want privately, from messaging to secure payments.
"Privacy and safety will be built into every step. For example, Calibra will have a dedicated team of experts in risk management focused on preventing people from using Calibra for fraudulent purposes. We'll provide fraud protection so if you lose your Libra coins, we'll offer refunds. We also believe it's important for people to have choices so you'll have the options to use many other third-party wallets on the Libra network."
Cryptography, he added, would make it hard for hackers to get hold of people's money.
Zuckerberg's promise doesn't quite stack up with Calibra's draft terms of service, which detail how data may be shared with Facebook and vice-versa under limited circumstances.
Here's what the terms say:
"Aside from limited cases, Calibra will not share account information or financial data with Facebook, Inc. or any third party without customer consent. For example, Calibra customers' account information and financial data will not be used to improve ad targeting on the Facebook, Inc. family of products.
"The limited cases where this data may be shared reflect our need to keep people safe, comply with the law, and provide basic functionality to the people who use Calibra."
In other words, Facebook promises not to use people's transaction data to inform targeted ads, but may use data to prevent crime.
With users' permission, Facebook may also share social media data with Calibra to for a "personalized or improved" experience. Finally, the terms state, Calibra will use anonymised Facebook data to study things like internet adoption. Here's the relevant section:
"Calibra will use aggregated Facebook, Inc. data that is not linked to your Calibra account to improve the Calibra product. For example, we may use Facebook, Inc. data to see which regions have broader internet adoption.
"Calibra will use customer data to facilitate and improve the Calibra product experience, market Calibra products and services, comply with legal and regulatory obligations, and ensure safety, security, and integrity. We may also use customer data to conduct research projects related to financial inclusion and economic opportunity with, for example, academic institutions and NGOs, though any published results will only contain aggregated statistics."