Facebook is now officially moving into the cryptocurrency sector according to a recent in-depth Wall Street Journal article. The project called “Project Libra” is focussed on creating a payment network with a native stablecoin. The report adds that Facebook is currently in talks with Visa, Mastercard, First Data and various merchants to create the network which has the potential to serve the one-third of the world’s people who log on monthly to Facebook.
The effort, should it succeed, threatens to upend the traditional, lucrative plumbing of e-commerce and would likely be the most mainstream application yet of cryptocurrency. It comes as the social-media giant is under intense pressure from regulators, users and shareholders to address privacy shortcomings.
At the heart of the initiative, underway for more than a year, is a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet, according to people familiar with the matter.
Facebook’s secretive plans for a new payments system involve both investments from traditional financial firms and the potential for users to be rewarded for their activity on the platform.
A source close to the situation confirmed to The Block aspects of The Journal’s report, including that Facebook is recruiting financial firms to help with the project’s launch and that its name is Libra.
Big takeaways from the report:
. Facebook is planning to launch a full payments network (rather than just remittances) and in discussions with payment networks Visa and Mastercard, payments processors such as giant First Data as well as large e-commerce merchants to support the launch.
. Facebook is seeking up to $1 billion in investments collectively from these firms in order to act as collateral to bolster and back a stablecoin that will be associated with the payments network.
. A stablecoin will exist as the currency of the payments system in order to eliminate credit card fees for merchants as well as to avoid the volatility of other cryptocurrencies like bitcoin and ether.
. The company is considering tying the coin to Facebook’s core ads engine, rewarding users for viewing ads and then purchasing goods, similar to how loyalty points rewards work.
Facebook’s secretive plans for a new payments system involve both investments from traditional financial firms and the potential for users to be rewarded for their activity on the platform.
Libra Networks was registered in Geneva on 2 May, and will provide financial and technology services. Moreover, related hardware and software will be developed in its wheelhouse. Switzerland has been recognised as a hub of blockchain and cryptocurrency technology, with the Swiss town of Zug referred to as ‘Crypto Valley’ throughout the world.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
