After months of rumors, there seems to be a Facebook Cryptocurrency. Reports last week said its planned launch was slipped for June 18, and now it appears that the CryptoCurrury, Libra, has several legit backers, according to the Wall Street Journal.
First notices call for a call – and a $ 10 million (£ 7.4m) request – for a third-party organization interested in introducing a consortium to propose it to Cryptocurrency. The WSJ reports that among those purchased in Visa, MasterCard, PayPal, Uber, Stripe, Booking.com, and MercadoLibre, an E-commerce site. Facebook was supposedly looking for $ 1 billion (£ 794m) to fund the currency, which would be a stable currency — a type of Cryptocurrency pegged to traditional, government-backed currency in order to moderate volatility.
Legitimate payment institutions buying in to the currency are great for Facebook. With all the negative pressures behind its handling of privacy, known known is the de-fasos endorsement that lends itself to an air of credibility. Still ahead of LAHRA's porridge, details are still fuzzy when it comes to how the consortium will work, how the coin works, and how easy it will be to overcome severe regulatory hurdles in the most economically advanced countries. An early-year-old report from last year suggested that Libra was designed for emerging markets – where Facebook WhatsApp is popular, remittances are common, government-backed currency can be volatile, and it's a decent percentage of the population that's less . This week's jokes say that users who send money through WhatsApp or Messenger will incur zero fees.
What we do note about this consortium is that it will be reported as the "Libra Association." As reported by the WSJ, members can act as "nodes" to confirm and record transactions. This will effectively create a new payment network, and what would mean a host of regulatory questions, and the potential that, like other cryptic claims, could be used for money laundering and funding terrorism. That's especially true, as the information reported last week you will be able to use ATMs to convert traditional funds for Facebook's Cryptocurrency.
On Thursday, Analysts at the Royal Bank of Canada wrote to investors that they "believe this could prove to be one of the most important initiatives in the company's history to unlock new engagement and revenue streams."
To this end, adding an independent overseas organization is a savvy move. It basically gives Facebook something out of time, or at least other entities to blame, if that kryptocurring catches on and is a complete disaster. Meanwhile, payments institutions get a foot in the door and a way to keep tabs on a potential new competitive trade network if it goes well.
In any case, we'll know more when Facebook slips to put a white paper on the theme next week. The currency itself is expected to launch several years. [Wall Street Journal]