How Facebook’s New Cryptocurrency Could Affect Your Wallet

In mid-June, Facebook said ‘ta-daaaa’ and revealed plans to launch a new cryptocurrency next year called Libra. Nothing to do with horoscopes.

Quick refresher: Cryptocurrencies have been around since 2009 when Bitcoin (the OG) was born. Now there are hundreds, including popular ones like Litecoin and Ethereum. Cryptocurrencies are unregulated, computer-generated money. Meaning you can’t physically hand it over at a store. Instead, you hold it in your ‘digital wallet.’ And try REALLY hard to never forget your password.

Here’s how Libra would work: You trade in your IRL currency. Then you can spend Libra worldwide for almost no fees. And you can change your mind and cash out for 'real' money anytime.

What’s not to like? Lots of people get freaked out by cryptocurrencies’ notorious mood — er, price — swings. But unlike Bitcoin and friends, Libra’s value will be tied to actual currency (like the US dollar and euro) and backed by a reserve fund. Meaning more stability.

Here’s what FB’s new biz could mean for your wallet.

It could get a LOT easier to spend money. Spending Libra could be as easy as sending a text. You’ll be able to access its ‘digital wallet’ Calibra on FB Messenger, WhatsApp, and eventually its own app to send money to friends. FB’s hoping you’ll also be able to use Libra with popular brands like Uber and Spotify.

If you’re thinking this sounds like Venmo or PayPal, you’re not wrong. But maybe with cheaper fees and the ability one day to load up on Libra with cash instead of a debit or credit card.

You might want to keep an eye on your credit if you use it. The words ‘Facebook’ and ‘trust’ haven’t always gone together. Just ask regulators and lawmakers, who aren't sold on the idea and say FB hasn't earned our trust yet. Zuck and his team promise it put protections in place so you can trust it with your private financial info. Still, it might not be a bad idea to keep an eye on your credit report, which can flag fraudulent activity. Just in case.

Your investments could go on a ride. FB is a big player in many people’s portfolios. If you have investments that track major indexes, like the S&P 500, you probably own a little piece of FB. Stock prices spiked right after the company shared its status update on crypto. But if regulators ever totally shut down Libra's launch plans, the opposite could happen. Buckle up.

theSkimm: FB is the first mainstream company to adopt crypto. And it could potentially change the way millions spend (and send) money in the future. But it’s also not for everyone. If crypto or cash-free spending sounds like a great way to blow your budget without realizing it, feel free to unfollow. 

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