Yahoo Finance Facebook lobs a 'Hail Mary' as it faces scrutiny over data-sharing practices
Facebook’s (FB) ambitious cryptocurrency project ‘Calibra’ comes as the social media behemoth continues to face scrutiny about data privacy. While Calibra may actually amplify those concerns for some, at least one expert thinks it may help alter the way people view the platform’s data-sharing practices.
“This is kind of their ‘Hail Mary’ to actually change the way you look at privacy, but also their ability to grow their next billion dollar market,” R "Ray" Wang, Constellation Research Principal Analyst & Founder tells Yahoo Finance’s “The Ticker.”
In its description of Calibra, Facebook states explicitly: “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.”
Facebook nevertheless faces an uphill battle. On Tuesday, Rep. Maxine Waters (D-CA) called on the social media company to “agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues.”
With Calibra, Facebook is aiming to shakeup the global payment industry.
“This is basically the next version of PayPal. If PayPal were to evolve, it would have become a crypto that’s in a P2P (peer-to-peer) digital custodial wallet,” Wang said. “What they’re smartly doing is creating these joint ventures around what we call data-driven digital networks.”
In fact, PayPal (PYPL) is one of the 28 founding members part of the ‘Libra Association,’ that will oversee the new digital coin. Other partners include Mastercard (MA), eBay (EBAY) and Uber Technologies (UBER).
Wang also predicts Facebook’s cryptocurrency could revamp cross-border commerce.
“Just like what’s happening in China today with Alipay, there needs to be an equivalent,” he said. “Because we’re seeing basically a U.S. versus China kind of war on the Internet and on all things digital lifestyle.”
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McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @McKenzieBeehler
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