Each company will invest around $10 million to fund development of the currency, and will become part of the Libra Association, an independent consortium that will govern the digital coin, independently of Facebook, according to the report.
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Facebook Inc. is ready to unveil its cryptocurrency next week and has signed over a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. to back its currency project ‘Libra’, according to a report by the Wall Street Journal.
Each company will invest around $10 million to fund development of the currency, and will become part of the Libra Association, an independent consortium that will govern the digital coin, independently of Facebook, said the report.
The money will basically fund the creation of the coin, which will be pegged to a basket of government-issued currencies to avoid volatility in its value, the report added.
The WSJ report speculates that companies like Visa and Mastercard want to get involved with Project Libra so they can monitor Facebook’s payment ambitions, as well as benefit from the popularity of the currency if it takes off.
According to the report, neither Facebook nor any other member of the consortium is going to have any direct control over the cryptocurrency. Rather some of them will act as ‘nodes’ to verify transactions and keep records.
Another report by TechCrunch also said that Facebook has scheduled 18 June as the date of release of a white paper explaining its cryptocurrency’s basics, with a full launch planned for 2020.
Hundreds of cryptocurrencies have been introduced after the launch of Bitcoin in 2008. At present, there are more than 2,000 digital coins in practice. However, the launch of Libra is significant as it is launched by a company as big as Facebook which has 2.4 billion monthly active users. The new currency can allow users to send money over Facebook’s messaging products such as WhatsApp and Messenger, or partnerships can be forged with e-commerce firms to let users spend the currency online. According to some media reports, Facebook is also reportedly looking into developing an ATM-like physical terminal for people to convert their money into Libra.