During Facebook's annual shareholder meeting on May 27, 2020, the founder, Chairman, and CEO of the social media giant, Mark Zuckerberg talked about how Libra benefits the company financially. Zuckerberg said,
“Not just Libra, but all of the commerce work that we're doing is that you should really think about it in terms of our ads business.”
He explained how the auction is an important property of the ads business which means, they don’t set a price, rather every business can just bid for themselves what an ad is worth to them.
This means they can offer the lowest possible price.
It also means those businesses will be interested in bidding more because they will get more and the idea behind offering additional tools, whether it's around commerce like Facebook Shops or around payments like Libra or Facebook Pay, is to make commerce be more effective for businesses. Zuckerberg said,
“When they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that's on file, then it basically becomes worth it more for the businesses to bid higher in the ads than what we see are higher prices for the ads overall.
So that's broadly the strategy around going deeper on commerce and payments.”
Updating the core infrastructure of payment
During the call, he also shared that the payment is an area where the core infrastructure hasn't been updated in a very long time.
Transferring money or paying for things between countries is still often very difficult as such,
“there are a lot of opportunities with Libra to make the process of commerce and payments helpful — a lot easier.”
This, he believes, isn't good for people around the world but also the economy overall. He said,
“And we will be able to participate in some amount to that value creation ourselves through higher prices in ads if businesses are succeeding using these tools.”
Just this week, Facebook renamed the wallet Calibra to Novi — a combination of two Latin words: Novus which means “new” and Via meaning “way,” to distance it from the Libra digital currency.
We can’t wait to start rolling out the Novi wallet as soon as Libra mainnet goes live. In the meantime, here’s a little video (play with sound — I love that tune!) 3/3 pic.twitter.com/Fbrxhxpg5d
— David Marcus (@davidmarcus) May 26, 2020
“People were confusing Libra and Calibra all the time,” said David Marcus, Facebook's head of blockchain. “In hindsight, it's hard to blame them.”
Libra digital currency was first announced in June 2019 as a global currency that would be nearly free to send across borders. However, since then the project has faced many hurdles.
The fiat-backed digital currency would be governed by the Libra Association made up of 27 companies and nonprofit organizations. Its first chief executive officer, Stuart Levey, was also named earlier this month.
The Association hopes to launch the Libra currency by the end of this year.