Facebook Inc. has signed up more than a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc.to back the new cryptocurrency that the social-media giant plans to unveil next week. Visa and Mastercard are reportedly quite invested in the currency while other Silicon Valley firms such as PayPal, Uber, Stripe, and Booking.com are fully supporting the currency.
Facebook's new cryptocurrency will be pegged to the value of the basket of government-issued currencies, which will enable it to avoid the wild price swings of other digital currencies such as Bitcoin. If all goes according to plan, Facebook will purportedly secure $1 billion from the 100 participants as it is reportedly charging each member $10 million to manage their own node.
It is still not entirely clear, even to some members of the consortium, how the coin will work or what their roles will be, people familiar with the project said.
The social networking giant has also set up a group within the company, headed by Messenger chief David Marcus, to explore Blockchain technology and its potential use for the platform.
The highly secretive project has around 100 staff and Facebook has registered the Libra Networks company in blockchain friendly Switzerland.
Earlier in June, the company ignited a discussion about its crypto Stablecoin initiative with the US Commodity and Futures Trading Commission (CFTC).
Facebook counts more than 2 billion users worldwide, many of whom come from developing countries and are unbanked.
Facebook has attempted to launch two digital tokens in the past without success.