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After months of rumors, it seems like a cryptocurrency on Facebook is imminent. According to reports last week, its planned launch is scheduled for June 18, and it now appears that the cryptocurrency, Libra, has some legitimate sponsors, according to the Wall Street Journal.
The initial reports indicated that Facebook had sent a call (and a $ 10 million fee) to any third-party organization wishing to join a consortium to manage the proposed cryptocurrency. The WSJ reports that Visa, Mastercard, PayPal, Uber, Stripe, Booking.com and MercadoLibre, an Argentine e-commerce site, are among the buyers. Facebook is expected to seek $ 1 billion to finance this currency, which will be a centerpiece, a kind of cryptocurrency linked to the traditional currency, managed by the government, to reduce volatility.
Legitimate payment institutions that buy in the money are important to Facebook. With all the negative press behind its privacy management, calling on known funders is a de facto endorsement that gives it an air of credibility. However, before the launch of Libra, the details remain unclear as to the functioning of the consortium, the functioning of the room and the ease with which it will be possible to overcome strict regulatory obstacles in most economically advanced countries. According to a report released by Bloomberg early last year, Libra was aimed at emerging markets. Facebook's WhatsApp is popular, remittances are common, the government-backed currency can be volatile and a decent percentage of the population without a bank. Leaks with leaks last week that said users who send money via WhatsApp or Messenger will not pay any fees
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What we know about the consortium is that it would be called the "Libra Association". As stated by the WSJ, members could act as "nodes" to verify and record transactions. This would effectively create a new payment network, which would involve a host of regulatory issues, as well as the potential for its use, like other crypto-currencies, for money laundering and financing. terrorism. This is particularly true, because according to the information reported last week, you can use ATMs to exchange traditional money against the Facebook cryptocurrency.
On Thursday, analysts at Royal Bank of Canada wrote in a note to investors, "They are convinced that this could prove to be one of the most important initiatives in the history of the company to release new sources commitment and income ".
To this end, the addition of an independent monitoring organization is a wise decision. Basically, this gives Facebook a kind of exit, or at least other entities to blame, if this cryptocurrency clings and constitutes a total disaster. Meanwhile, payment institutions have a foot in the door and a way to keep an eye on a potential new commercial network if it works well.
In any case, we will know more when Facebook publishes a white paper on the subject next week. The currency itself should be launched next year.
[Wall Street Journal]
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