Facebook’s Libra coin has received the support of more than 12 leading firms. These include Visa Inc., Mastercard Inc., PayPal Holdings Inc, and Uber Technologies Inc. among others. Facebook plans to reveal the coin’s white paper in the coming week and launch it in 2020.
According to a report, the global firms will invest approximately $10 million each in a group named Libra Association. This consortium would serve the function of governing the coin. Reportedly, Facebook will use this money to fund the creation of the coin. As noted by earlier publications, the coin will be pegged to a basket of fiat currencies.
According to a WSJ,
It has been a decade since bitcoin was born, yet consumers hardly use it—or the hundreds of other cryptocurrencies—to pay for things. Facebook is betting it can change that with a crypto-based payments system built around its giant social network and its billions of users.
Members of the Consortium Voice Various Concerns
Per sources familiar with the project, some members of the governing group do not know how the coin will function or what their roles will be. Others are concerned that the coin might face compliance issues, especially in the US. On top of this, some members are worried that bad actors might use Libra to launder money and finance terrorists.
Allegedly, neither Facebook nor the individual members of the Libra Association will have direct control over the coin. Some of the members will act as nodes that verify and keep transaction records, creating a new payments network. In so doing, the consortium will separate the crypto network from Facebook’ social platform. This will help the coin avoid coming under fire should Facebook have any problems with regulators or users.
Facebook’s 2.4 billion Users Attracted the Investors
Facebook has almost 2.4 billion active users per month. This figure represents a huge threat especially for credit card companies, which have been hoping a technology firm won’t create a payment option that will eliminate card networks. Therefore, it was hard for firms like Visa and Mastercard to pass up this investment opportunity.
By investing in the project, the card firms would keep tabs on Facebook’s payment ambitions. Apart from this, they would enjoy the benefits should the project attain wide adoption.
A positive sign for Bitcoin Adoption
Anthony Pompliano, the co-founder and partner at Morgan Creek Digital believes that this news is positive for bitcoin as it would boost its adoption. This is because Libra would challenge banks and other centralized financial institutions.
Facebook has secured Visa and MasterCard as two of the backers for their new cryptocurrency.
Very positive signs for future adoption of Bitcoin 🔥
— Pomp 🌪 (@APompliano) June 13, 2019
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