Facebook's new cryptocurrency gets big support



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The collection of financial companies and e-commerce companies will invest approximately $ 10 million each in a consortium that will govern the digital play, according to people familiar with the subject. The money would be used to finance the creation of the coin, which will be attached to a basket of currencies issued by the government in order to avoid the wild fluctuations that have ensnared other crypto-currencies, have- they declared.

Last month, the Wall Street Journal announced that Facebook was recruiting financial companies and online merchants to help launch the encrypted payment system. He was seeking about $ 1 billion for the Libra project. This secret project, in preparation for over a year, revolves around a digital piece that users could send each other and use to make purchases on both Facebook and the Internet.

Discussions with some partners are underway, and the potential membership of the group could change, the members added.

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A spokeswoman for Facebook declined to comment.

It's been a decade since bitcoin was born, but consumers are barely using it, as well as hundreds of other crypto-currencies, to pay for their purchases. Facebook is betting that this can change that with a cryptographic-based payment system built around its giant social network and its billions of users.

Even for some members of the consortium, we still do not know how the room will work or what their role will be, said people familiar with the project. Regulatory barriers in the United States and elsewhere are high.

Some members expressed concern that the chip could be used to launder money and fund terrorist organizations, according to some people, a persistent problem with bitcoin and other cryptocurrencies.

Facebook will not control the piece directly, nor will individual members of the consortium known as the Libra Association. Some members could act as "nodes" along the system that verifies transactions and records transactions, creating a whole new payment network, depending on who is familiar with the configuration.

Stripe Financial Technology Company Inc., Booking.com travel booking site and Argentina based e-commerce site

MercadoLibre
Inc.

have signed the project, indicate some people, an indication of its international ambitions.

By separating the cryptocurrency network from the Facebook platform, the social media giant gets in touch with users and regulators in case of problems, which is a significant advantage at a time when he is in a hurry to address privacy issues. Yet Facebook, as a developer of the underlying technology, could exert considerable influence over it.

Nevertheless, the attractiveness of nearly 2.4 billion monthly Facebook active users was too much to be left out. Card issuers have long feared that a technology giant could get into their business, creating a payment option that cuts card networks. By participating in Libra, they can closely monitor Facebook's payment ambitions, while benefiting from a clear advantage if the project gains traction with consumers.

Facebook plans to publish a white paper presenting the play next week, according to people close to his project, adopting a format popularized by the creator of the pseudonym Bitcoin, Satoshi Nakamoto.

The company asked the consortium members to co-sign the paper, some people said.

Write to AnnaMaria Andriotis at [email protected], Peter Rudegeair at [email protected] and Liz Hoffman at [email protected]

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