Mark Zuckerberg-led social media giant Facebook gets big firms on board its cryptocurrency project. According to Wall Street Journal, PayPal, MasterCard and Visa are set to invest $10 million each in an association that will govern the Bitcoin rival.
Leading Payment Institutions Joins The Project
After months of speculations, it appears a Facebook cryptocurrency is forthcoming. Numerous reports last week said that the crypto’s planned launch is set for June 18 and it now appears that the project- codenamed Libra- has some legit backers.
According to reports, Facebook had initially put out a call along with a $10 million fee for any third-party organizations to join an association, said to be called the “Libra Association”, which will govern its proposed cryptocurrency. The Wall Street Journal Reports that leading payment institutions; Paypal, Mastercard and Visa are among those that have been brought in so far each paying the said $10 million.
Facebook is looking for $1 billion to fund the new currency. It has also been said that the currency is going to be a stablecoin. A stablecoin is a type of cryptocurrency that is pegged to conventional, government-backed currencies like the US dollar so as to lessen volatility.
The official launch of the currency is scheduled for 2020.
The Backing Good For Facebook
The fact that heavyweights in the online transaction and payment industry are backing the social media giant’s crypto project is good news for the company. In recent times, Facebook has been receiving a lot of negative press concerning how it handles privacy. Getting backing from these well-know companies is in actuality a support that gives it an air of credibility.
Additionally, this backing could also excite traders in the sense that it can bring about the increase of the number of payment transactions occurring and being monetized on the Facebook platform. This could provide Facebook with an additional source of revenue from its billions of users and in return grow its earnings per share (EPS).
Unclear Reports About The Facebook Cryptocurrency
However, ahead of the launch of the cryptocurrency later this month, details about how the association will operate and how the coin will work is still unclear. Also, it is not yet clear how the crypto will be able to succeed in dealing with strict regulatory barriers in nations that are more economically advanced.
Early last year, a Bloomberg report had suggested that the Facebook crypto project was intended for emerging markets where Whatsapp, a Facebook-owned messaging app, is popular, the government-backed currency can be volatile, remittances are common and they also have a decent percentage of the population that is bank-less. That might concur with reports from last week that stated that users who send money through Whatsapp and Messenger will incur zero fees.
Other Companies Reported To Have Joined The Project
It is reported that Facebook has so far signed over a dozen companies into the project. Uber Tecnologies Inc is another one of the world’s largest corporations to be signed along PayPal, Visa and MasterCard.
Other organizations that are also reportedly backing Facebook include MercadoLibre – an Argentinean e-commerce site, Booking.com – a hotel booking platform and Stripe- a US -based payments technology company.