Facebook’s new cryptocurrency, Libra, is getting backed by big firms. The social media giant has signed up financial and e-commerce companies, among them, Visa, Mastercard, PayPal and Uber, which will invest $10 million each in a consortium that will govern Libra, a new cryptocurrency, according to the Wall Street Journal. Stripe, Booking.com and MercadoLibre are also backing the cryptocurrency, but is unclear what their roles will be.
The Libra Association will be the name for the independent consortium which will govern the digital coin independently of Facebook. The WSJ is speculating that these companies want to participate in the project so that they can monitor Facebook’s plans and take advantage of the popularity that comes with launching Facebook’s currency.
Facebook’s global crypto coin called Libra was first conceptualized last year when the company brought in David Marcus, a former president of PayPal to run the project. Christian Catalini was reportedly appointed as the chief economist for the project.
Stop calling it GlobalCoin
Despite BBC suggesting that Facebook’s secret cryptocurrency was named as GlobalCoin, Cointelegraph reported that “The Information’s dossier makes no mention of this label. The publication’s sources insist on another codename that has also previously been circulated in the media, Libra.”
As we noted in an earlier article, Facebook has already registered a company in Switzerland called Libra Networks. According to the Information’s sources, Facebook’s CEO, Mark Zuckerberg, was especially interested in the project, whereas chief operating officer Sheryl Sandberg and chief financial officer David Wehner were skeptical.
Libra was designed as a stablecoin, pegged to the US dollar, but the latest reports have revealed that it will be pegged to a basket of currencies to prevent price fluctuations. Facebook users will be transferring payments and paying for services and goods with Libra, initially, through the company’s platform, but later on other websites. As WSJ explained, neither Facebook nor any other consortium member will manage Libra, although certain investors might act as processing nodes, verifying payments and maintaining records.
The Verge highlighted that Facebook would have to overcome regulatory obstacles before it launches the currency, as well as address concerns from within the consortium.
Facebook’s Libra could be unveiled next week, and the company will aim to release a white paper for the project. Tech Crunch has reported that the white paper is scheduled to be released on June 18.
Sources: Wall Street Journal, Cointelegraph, Tech Crunch