Few can argue with Facebook’s ability to get the world talking. And this doesn’t even refer to its 2.38 billion monthly active users.

Since its inception in 2004, Facebook has continually courted controversy concerning the psychological effects of social networking, tax avoidance, advertising fraud, allowing harmful content to be published on its platform, and above all else, privacy.

Therefore, it’s hardly surprising that Facebook’s latest product offering – a cryptocurrency called Libra and a digital wallet called Calibra – has the masses up in arms once again.

But given its checkered history when it comes to compliance, how can Facebook expect to enter the financial services industry and convince its user base that their money is safe?

Simple…by choosing the trustworthy architecture of blockchain.

What Facebook’s Libra could mean for fintech

In the days since Libra was announced, it has come under intense scrutiny from regulators, politicians and financial figures.

While the Bank of England Governor Mark Carney gave it a cautious welcome, the Reserve Bank of Australia Governor Philip Lowe was a lot more dismissive.

“I have long thought that a kind of cryptocurrency would not really take off in Australia,” Dr Lowe said. “We already have a very, very efficient electronic payments system that allows anyone of us to make bank payments to another person in five seconds just knowing their mobile phone number.”

However, you only have to look at recent adoption trends around next-generation fintech products to realise that consumer appetite for faster, safer, and more convenient banking is skyhigh.

Take the growth in Venmo’s payment volume for example. The PayPal-owned payment app reported an eye-opening USD$21 billion in transactions in the first quarter, up more than 1,500 percent from the same period only four years earlier.

Fintech apps have been gradually carving out larger user bases and fostering habit-forming behaviours too. In fact, global downloads of finance apps hit 3.4bn in 2018, up 75% from 2016, fuelled in Australia by microloan alternatives to credit cards such as Afterpay.

These kind of trends could well be why Calibra, Facebook’s new digital wallet, will be integrated into its Messenger and WhatsApp applications. It will also be available as a dedicated smartphone application, allowing users to send money as if they were sending a text message.

An alternative reason for Facebook’s Libra

In a document outlining how the new cryptocurrency will work, Facebook said its goal is to foster more access to “better, cheaper, and open financial services.” But unlike other cryptocurrencies, Libra is tied to a range of global assets to reduce volatility.

It will also be “governed” by the independent, non-profit Libra Association, of which Facebook is a founding member alongside Mastercard, PayPal, Visa, eBay, Uber, Spotify and others. Furthermore, Libra’s blockchain will initially be closed, with only a select number of people able to run the software and verify transactions.

By adopting the watertight nature of blockchain, as well as a few accountable security practices along the way, Facebook’s trustworthiness could rise as quickly as Libra’s user base.

“For all the controversies, Facebook’s profits remain strong and its user numbers remain steady. Yet it has lost something that in the long run is even more important: the trust of its community,” writes Kevin Werbach, the author of The Blockchain and the New Architecture of Trust, for The New York Times.

“Trust is the great enabler of human connections and commerce. Facebook is smart enough to recognise that without the bond of trust, all relationships are merely contingent and transactional.”

Libra still raises a number of issues that need to be seriously considered before launching – blockchain engineer Elaine Ou says the current Libra software is ‘incomplete’ and the accompanying documents describe “a lot of functionality that hasn’t been built but also refer to major architectural features that have yet to be invented.”

But irrespective of what happens between now and when Libra is made available to the public, the way society goes about managing money may never be the same again.