Facebook gets big name backers for crypto project

Daniel Fowler
June 16, 2019

If everything goes as per plan, Facebook will supposedly raise $1 billion from the 100 participants as it is supposedly levying a fee of $10 million to administer their own node. In a show of support for Facebook's cryptocurrency endeavour. Libra, which has been in the works for about a year, will not be directly controlled by Facebook nor members of the consortium.

Facebook has reportedly enlisted the support of a dozen organizations to underpin its cryptocurrency project and help keep the social media giant honest.

As The Block first reported earlier today, the firms involved in the project, as members of its governing consortium, include companies spanning technology, digital assets, and retail.

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The latest news appears to confirm the statement of Laura McCracken, the head of financial services of the social networking site, that Facebook is set to unveil the details of its cryptocurrency project on June 18.

Libra is expected to be a stablecoin which will be a bespoke currency that is pegged to a bundle of fiat currencies. This event will signify the launch of a testnet meant to gather community feedback on the project and inform the future direction. Sources revealed to the publication that, to avoid volatility, the digital coin will be linked to a number of government-issued currencies. It will operate within Facebook's messaging infrastructure, which covers WhatsApp, Instagram, and Facebook Messenger. A Facebook coin would have some use cases (sending money across borders for example), but in a day-to-day sense, having to buy credits to use isn't addressing a problem for many people.

On Thursday, analysts at Royal Bank of Canada wrote in a note to investors that they "believe this may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams". "It is a good idea though because Facebook is now going to start competing with Amazon in e-commerce".

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