Facebook said the new subsidiary, called Calibra, will utilise a blockchain-powered platform to enable users to engage in financial services activities a new global cryptocurrency network called Libra.
The first offering to be powered by the Calibra platform, which will officially launch in 2020, will be a digital wallet embedded in Messenger, WhatsApp and a stand-alone app, to facilitate Libra transactions.
In a statement, Facebook claimed that the new offering will help remove barriers hindering access to financial services across the world.
“For many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account and those numbers are worse in developing countries and even worse for women,” Facebook noted.
“The cost of that exclusion is high — approximately 70 per cent of small businesses in developing countries lack access to credit and $25 billion is lost by migrants every year through remittance fees.
“This is the challenge we’re hoping to address with Calibra, a new digital wallet that you’ll be able to use to save, send and spend Libra.”
Facebook also intends to expand into other services, including the facilitation of bill payments and the purchasing of retail products.
There also reports that Facebook has plans to enter the lending space with its new Calibra platform, but such reports are yet to be confirmed.
Facebook has assured prospective users of the new platform that it is committed to protecting their privacy and security.
“When it launches, Calibra will have strong protections in place to keep your money and your information safe,” the social media giant added.
“We’ll be using all the same verification and anti-fraud processes that banks and credit cards use, and we’ll have automated systems that will proactively monitor activity to detect and prevent fraudulent behaviour.
“We’ll also offer dedicated live support to help if [users] lose your phone or your password — and if someone fraudulently gains access to your account and you lose some Libra as a result, we’ll offer you a refund.”
Facebook asserted that Calibra would not share account information or financial data with its parent company or any third party without customer consent.
“This means Calibra customers’ account information and financial data will not be used to improve ad targeting on the Facebook family of products,” the company noted.
“The limited cases where this data may be shared reflect our need to keep people safe, comply with the law and provide basic functionality to the people who use Calibra.”
The social media giant said that it would be consulting with a wide range of stakeholders to ensure the Calibra platform is safe and accessible prior to the launch.