Facebook’s Crypto Project Libra Get Backing From Uber, Paypal
Social networking giant Facebook is all set to unveil its much-talked-about cryptocurrency Libra next week. California-based firm has also managed to get backings of over dozen of financial and internet services firms for the project.
Facebook has already sought blessings from the US Treasury and the Bank of England, according to a BBC reported last month.
The report further reasoned why the investment for these firms would be important as they will also be benefitting from the tie-up.
The companies along with venture capitalists and telecommunications firms will reportedly invest around $10 million each into the consortium.
Facebook has been trying to ward off hostile regulatory scrutiny after a series of privacy abuses and the spread of fake news.
The consortium will be managed externally and will seek to build trust among consumers by pegging the virtual coin to a basket of currencies including the dollar and euro, the Journal said.
The cryptocurrency is reported to be announced on June 18. The full-fledged launch program is scheduled for 2020.
With more than two billion users across its platforms, which include WhatsApp and Instagram, Facebook could have the clout to bring cryptocurrency out of the fringes and replicate what companies like WeChat in China did, where Facebook is banned.
WeChat allows its users to chat, shop and play games without leaving its platform, generating more revenue by offering a one-stop portal.
Facebook is reportedly planning to allow peer-to-peer transaction of its cryptocurrency and the proposed currency system would not require to use banks to transfer money to buy or sell digital currency.
However, the regulatory aspects will be something that may act as a roadblock for Facebook.
RBI, last year, had restricted entities from providing services in virtual currencies to any individual or business. Though, there is no law to prevent users from exchanging digital tokens. Facebook would look to initially work under the ambit of the rule.
As per blockchain experts, social media will face challenges in making a link between digital coin and rupee. Going beyond traditional payments methods will be a huge shift for Facebook in India, they added.
Next week, things will be more clear as Facebook will unveil its plan for the widespread rollout of the cryptocurrency.