Facebook has vowed to keep itself separate from Calibra and not use everything Facebook knows about you to show you targeted ads. In an interview with CNBC, Marcus said that marketing data “is not the way we will monetize” and that they “are going to make strong commitments, notably on privacy, that financial data and social data never comingle.”
Instead, Libra is going to make its money through generating ad revenue on Facebook that the company hopes will increase due to Libra.
Marcus says that Libra will “create a lot of opportunity for more commerce on the platform, more transactions, and those small businesses will be buying more ads because those ads will be more effective” due to the usage of a singular global currency. Marcus says that plan should be more than enough for at least the first few years of Libra. Basically, Facebook is hoping that if enough people and business owners will use Libra, which ultimately leads to users spending more time on Facebook and WhatsApp, which means more money from advertisers.
Another important note: If all goes to plan, Libra will be a global currency, which is an opportunity for Facebook to open up more revenue streams from under-monetized countries.
For example, Facebook makes the majority of its revenue from the U.S. and Canada, where its average revenue per user, including WhatsApp and Instagram, is $34.86. In Europe, individual users generate $10.98 per user, while Asia Pacific region only averages $2.96. And below Asia Pacific is simply categorized as the rest of the world. In countries where users are poorer and do not have access to or the ability to use traditional banks, Libra wants to present itself as a banking solution. Which, theoretically, means a way for those “unbanked” users to move money through Calibra and more time spent on Facebook’s products.
Libra will also make money via interest generated from its reserve. That interest will cover operating and ecosystem costs at first, but after those costs are paid, the reserve will pay out dividends to investors. The bigger and more popular Libra gets, the more money the investors can reap.