For more than a year, Facebook has quietly worked on a new cryptocurrency dubbed the Libra. Reports suggest that Facebook Inc. has signed up more than a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc., Spotify and Uber Technologies Inc. to back a new cryptocurrency it plans to unveil this week and launch next year.
Sources told the Wall Street Journal, that users are able to send the digital coin to each other. They will also use the Libra to make payments on Facebook and other websites (Instagram, YouTube).
Facebook has yet to lock down agreements with all the major backers, however. The sources added that the consortium’s membership may also change.
In addition, most major companies have no clue how the Libra will function exactly, nor its value. Members remain concerned about how Facebook and its users will use the cryptocurrency tokens.
Member companies in the Libra Association may ultimately serve as nodes, allowing them to verify transactions and maintain financial records. Neither Facebook nor its backers, including Spotify, would control the cryptocurrency. Separating itself from the Libra would also add legal protection for the social media giant against potential liability over how its 2.4 billion users actually use the cryptocurrency. Facebook may still “exert considerable control” of the Libra.
Promoting the new digital coin, Spotify wrote:
“Libra offers [a]massive opportunity for simple, convenient, and safe payment over the internet (particularly for the 1.7 billion adults worldwide without access to mobile money, a bank account, or a payment card). We’ve seen this directly in many of the developing markets where we operate.”
“I think like cryptocurrencies and blockchain are obviously two of the biggest buzzwords you can have today. And for me, I don’t think technology in itself is that interesting. What I do think is interesting is what we can do with that technology.”
“What Libra is trying to do is really about creating money on the internet by allowing this thing to go, especially to the place of where people don’t have these opportunities.”
“The most important thing is it will enable paying for things digitally in many of the places around the world where those kind of methods just [don’t] exist. A service like Spotify, you can imagine what would happen by allowing users for instance to be able to pay artists directly.”
“That opens up huge opportunities for how we can further our mission.”
How will it work: