MENLO PARK, Calif.–Facebook has formally announced its plans to launch a cryptocurrency called Libra, saying it will offer a secure blockchain-based payment system backed by hard assets and designed for mainstream users.
As CUToday.info reported previously, Facebook’s entry into cryptocurrency has long been rumored.
Joining Facebook in the Libra initiative are Mastercard and PayPal, and Uber and Spotify, all of which will help it create a “secure, scalable and reliable” cryptocurrency, the company said. In all, more than two-dozen companies are involved, including venture capital firms.
According to Facebook, it is creating a regulated subsidiary called Calibra in order to ensure “the separation between social and financial data.” Calibra will roll out a crypto wallet—a digital wallet that can be used to pay for items online and send money—using Libra, the Wall Street Journal reported.
2.4-Billion Potential Users
The blockchain-based payments system has been under development inside Facebook for more than a year and is headed by former PayPal President David Marcus. “Given Facebook’s 2.4 billion active users, the move is one of the most mainstream attempts to deploy digital currencies and has helped push the price of bitcoin higher in recent weeks,” noted the Journal.
Facebook said the network underpinning the new cryptocurrency would be governed by the “Libra Association,” which is to be an independent, not-for-profit organization based in Geneva, Switzerland.
Facebook said Libra has the potential to be used to make every day financial transactions like paying bills, making retail purchases and paying for public transport.
Looking for Cover
“The social-media company’s plan for a decentralized network, with lots of big partners, could give it some cover with users and regulators should problems arise,” reported the Journal. “Final decision-making authority will rest with the Libra consortium.”
Facebook said the subsidiary would be regulated, but didn’t say from where or by which global agency.