A new Wall Street Journal report revealed that three of the biggest payments companies and ride-hailing company Uber would be backing Facebook’s latest cryptocurrency. Uber, alongside, Visa, PayPal, and MasterCard will invest about $10 million to sign up for a consortium. It will be tasked to govern the crypto ecosystem by Facebook, which has already signed up over a dozen companies to support its efforts.
What Is Facebook Planning?
Facebook has been working on a hush project tied to blockchain and cryptocurrencies for a few months now. Sources suggest that they are planning to launch a stablecoin, i.e., a cryptocurrency tied to the value of a fiat currency, to facilitate their payments business. The cryptocurrency (dubbed Libra) could be unveiled next week before finally launching next year.
People familiar with the matter said that Uber, Visa, MasterCard, and PayPal will be a part of a consortium that governs the cryptocurrency. The $10 million invested by these firms will fund the new coin’s creation. The cryptocurrency by Facebook not be affected by the wild swings in the digital currency markets because it will be tied to the value of a fiat currency or a basket of fiat currencies.
Facebook’s Big Cryptocurrency Ambition
WSJ reported last month that the company is looking for backers and raise $1 billion to fund its crypto efforts. When launched, the crypto payments platform of Facebook will allow users to send and receive payments across its suite of apps- Facebook, Instagram, and WhatsApp. Talks with some partners are still ongoing. People familiar with the project said that some members of the consortium don’t know how the coin will work and how they will contribute to the project.
The launch of Facebook’s cryptocurrency could also help in boosting the mainstream acceptance of cryptocurrencies. However, some members of the consortium have expressed concerns about the coin’s use for money laundering and terrorist financing, two of the primary arguments against the use of Bitcoin.
A Facebook spokesperson declined to comment on the report.