Describing its new payment system as a ” global currency”, Facebook certainly has big plans for Libra. And the news that the social media giant plans to launch its own payments network has divided opinion in the world of cryptocurrency.
Set to launch in 2020, Libra is a digital cryptocurrency managed by Facebook subsidiary Calibra and 27 other companies and backed by financial assets.
According to a recent survey by eToro, 16% of people surveyed had heard of Libra, compared with 12% who were aware of Ethereum 12% and far higher than some other cryptocurrencies such as Litecoin.
However, while public awareness of Libra is impressive, especially as the cryptocurrency has not launched yet, this does not necessarily equate to public trust.
Thanks to recent events such as Cambridge Analytica scandal, in which a third party harvested data from millions of Facebook users without their knowledge, consumer trust in social media companies and their handling of user data has taken a hit.
Lack of Facebook trust puts Libra payments support in doubt
To shed light on consumer reactions to Libra, messaging app Viber surveyed 2000 respondents over 18 from the US and UK and discovered that Facebook may have a way to go before it can convince the general public of Libra’s merits.
According to the survey, 49% of people said they would not trust Facebook to keep their payment details secure when using the crypto payment service, with 29% are unsure whether they would trust Facebook with their information. Just 4% say they would trust Facebook to protect their information.
When asked about using Libra to make payments, just 1% of Brits said they would be willing to use Libra in this way, compared with 3% of Americans surveyed.
Interestingly, although 0% of Gen Z (18-24 years old) said they would be willing to try Libra (compared with 2% of baby boomers and millenials), they are the group most likely to trust Facebook to protect their information. Millenials are the group least likely to trust Facebook, with 50% saying they would not trust Facebook at all.
“The blistering pace of the digitalisation of economies and our lives underscores that there will be a growing demand for digital, global, borderless money. Indeed, it is now almost universally regarded as the future of money. This is why most major financial institutions globally already have or are preparing to establish crypto desks. It is why more and more retail and institutional investors are piling into the market. And it is why tech giants, like Facebook, are getting involved. And you can bet that where Facebook follows, other tech companies will do the same.“Being the social media monolith that it is, it is surely expecting this level of scrutiny. I would suggest that it is prepared for it, has the resources for it, and will welcome it, as it will make its cryptocurrency stronger.”