It is especially significant not only because Facebook, one of the biggest companies in the market, is launching it but also because various other big names are backing it.
According to an introductory blog post viewed by The Block, Libra will be built on the Libra Blockchain a "secure, stable, and reliable blockchain" and backed by Libra Reserve, "a reserve of real assets" that will provide the cryptocurrency with "stability, low inflation, global acceptance, and fungibility".
Each company will invest around $10 million in a consortium that will govern the cryptocurrency, the WSJ reported, citing people familiar with the matter. The money would be used to fund the creation of the coin, which will be pegged to a basket of government-issued currencies to avoid the wild swings that have dogged other cryptocurrencies, they said. In a show of support for Facebook's cryptocurrency endeavour.
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Stripe, Booking.com and MercadoLibre are part of the project, according to the Journal, though the report does not specify what their roles are. The social-media giant has also hired a United Kingdom bank lobbyist as its director of public policy in London, the Financial Times said. Mark Zuckerberg-led multinational company is expected to unveil Bitcoin rival Libra next week, while the official launch of the cryptocurrency is scheduled for 2020.
The social networking giant has also set up a group within the company, headed by Messenger chief David Marcus, to explore Blockchain technology and its potential use for the platform. With the company's plans to soon step into the crypto arena, the latest buzz tells us more about Facebook's new venture.
The release of Libra represents Facebook's boldest foray into financial services, and the social media giant hopes it will give an opportunity to the "1.7 billion adults globally" who are "outside of the financial system with no access to a traditional bank".