Facebook’s new digital currency has “good intentions” in wanting to remove some of the challenges around cryptocurrencies, a Mastercard executive has said.
The social network has announced plans to launch its Libra digital currency as part of an association with a number of other firms.
Facebook will incorporate the currency into its digital wallet called Calibra, while other companies will be able to use Libra in their own apps.
However, questions have been raised about whether the social network can be trusted in the financial sector after a number of data privacy issues.
they are attempting to remove volatility, they are attempting to put in consumer protections, they are attempting to fit within a regulatory environment
But speaking at an event for its concept payment technology, Ken Moore, the head of the Mastercard Labs research and development arm of the firm, said the new currency could help make the technology more accessible.
“What we see in Libra and Calibra – so the Facebook wallet and cryptocurrency – is an attempt to remove some of the challenges that we see that exist in ‘wave one’ cryptocurrencies like Bitcoin,” he said.
“So they are attempting to remove volatility, they are attempting to put in consumer protections, they are attempting to fit within a regulatory environment.
“We think the intention, therefore, is good, so therefore we are trying to be more supportive of that than we would necessarily have been.
“But beyond that, are there challenges with it? Yes. Huge challenges and those challenges have yet to be worked out. So we are working our way through that.”
Facebook has argued that the two biggest issues with cryptocurrencies so far have been scalability and volatility.
These issues, it says, will be addressed in Libra by launching it through Facebook apps such as Messenger and WhatsApp so it is widely accessible, and linking it to several international currencies in order to help keep its price stable.
Mastercard, along with a number of other high-profile firms including Visa, Spotify, eBay and Uber, were among those to back Facebook’s plans when they were first announced in June.
Facebook executive David Marcus appeared before US senators this week to defend its plans for the currency and confirmed it would not be launched until concerns raised by regulators had been addressed.
- Press Association