Facebook has signed up some of the world’s largest companies – including PayPal and Uber – to back its new cryptocurrency.
Visa, Mastercard, Paypal, Uber, Stripe, Booking.com and Argentinian eCommerce site MercadoLibre have each invested around $10 million to join Facebook’s Libra Consortium to govern and fund the creation of the digital coin.
The stablecoin – variously known as Libra or Global Coin – is due to be unveiled next week and will launch next year.
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.
The Wall Street Journal reported last month that Facebook was seeking to raise $1 billion from 100 node holders for the crypto payments network.
The relatively small number of nodes had led to criticism that the cryptocurrency will be too centralised.
In its report today the Wall Street Journal commented:
“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.”
Facebook is set to release a white paper introducing the coin next week, cosigned by consortium members, according to people familiar with the project.
The social media giant has been working on Project Libra for more than a year now, led by former Pay Pal president David A Marcus.
The highly secretive project has around 100 staff and Facebook has registered the Libra Networks company in blockchain friendly Switzerland.
The borderless, transaction fee currency is expected to be used across Facebook, Messenger, WhatsApp, and Instagram.
Facebook counts more than 2 billion users worldwide, many of whom come from developing countries and are unbanked.
However, Facebook users are also older than average and less familiar with cryptocurrencies.
Facebook has attempted to launch two digital tokens in the past without success.