Facebook could move into credit - Calibra wallet chief

I would suggest this is a dangerous area for Facebook to raise at this early, but critical, stage. The appeal of Libra is as a low-cost payment vehicle for many people around the world, with a weighted value of the leading currencies. The proposal is that all funds are held in government paper or bank accounts - of just the leading six or seven currencies - for a fully secured value. 

If Facebook talk of getting involved in loans and other financial services, it raises a question as to whether the security funds are going to be used for any of this? The answer should be a guaranteed "no", with the other foundation members similarly confirming that Facebook will not have access to the funds for whatever else it wants to do in other ventures.

It is going to be the biggest issue for Libra; government regulators want to be assured this is not a trojan horse. Hopefully Facebook will clarify this - and avoid giving what could be misleading commentary on non-connected potential projects? 

My assumption is that the reserves will be ringfenced to underpin the Libra currency. A Libra wallet won't pay any interest but Banks and Calibra will then offer savings accounts within the ecosystem which they will be able to reinvest as they wish (in loans and mortgages) but that will require a banking license and for them to hold capital and liquidity reserves.

@Barrie. I agree with you asessment. The Libra is not conditional for Facebook (and others) to step into the lending market (especially lending to finance consumer purchases can be low hanging fruit for them). But every activity in credit business requires a banking license. The Libra can be an attractive means of funding for them as the deposits on Libra accounts do not bear interest (like deposits on PayPal accounts).