Will a push from Facebook make cryptocurrency more mainstream?
According to reports by the Wall Street Journal, Facebook has managed to secure the backing of over a dozen companies for its upcoming Libra cryptocurrency. Facebook is reported to announce this next week.
These companies include companies Visa and Mastercard, PayPal, Uber, Stripe, and Booking.com. Each of these companies will invest around $10 million to fund the development of the currency and will become part of the Libra Association, an independent consortium that will govern the digital coin independently of Facebook.
With the establishment of an independent body, it will provide cover with users and regulators especially with past privacy concerns.
The cryptocurrency which will be called Libra will be unveiled on June 18th with a full release planned for 2020.
It’s will be a “stablecoin,” meaning it will be pegged to a basket of government-issued currencies in order to limit the volatility typically associated with cryptocurrencies like Bitcoin. This basically means it will be less volatile like other popular cryptocurrencies like Bitcoin.
Users will be able to send money over Facebook products including WhatsApp and Messenger. Facebook’s partnerships with other companies also means it will allow users to spend the Libra currency online. There have also been reports that Facebook is developing ATM-like physical terminals for users to convert their money into Libra.
How Facebook manages to get over regulatory hurdles with cryptocurrency remains to be seen as most governments aren’t yet fully onboard. Facebook CEO, Mark Zuckerberg, has already met with the Bank of England governor as well as the US Treasury and money transfer firms like Western Union.
There’s no word on if there will be subsequent meetings with other firms and other governments.
Will Facebook Help Push Cryptocurrency Mainstream?
The jury is still out on how well received a Facebook-backed cryptocurrency will play out in the public. But Facebook is a well-recognised brand and if they manage to simplify the use of cryptocurrency for its users, that could make it a big deal.
With the backing of companies of Visa and Mastercard, it could also help build a bit of trust for users to make transactions. We’ll have to wait on June 18th to see what all the details are.