Facebook's long-rumored cryptocurrency might not be a rumor anymore a week from now.
The Wall Street Journal reported on Friday that the social media giant had recruited "more than a dozen" companies to fund its upcoming cryptocurrency, reportedly called Libra. Among those companies are notable names in the payment processing space, such as PayPal, Mastercard, and Visa.
That means when Facebook reportedly unleashes its Libra white paper next week, it will do so with the blessing of several companies that could have been hurt by this had they not invested in it themselves. As the Journal report pointed out, these companies stand to benefit if Libra actually takes off.
Facebook apparently wants around $10 million from each backer, and that money would be used to create the digital currency. The backers could then act as nodes in a new payment network that would verify and record transactions, but the Journal's report said neither Facebook nor the group of backers would directly control Libra.
If the report is to be believed, Facebook users will be able to send Libra to each other or use it to facilitate purchases on or off the social network. It's not difficult to see why companies like PayPal and Visa would want to back Libra; Facebook has more than two billion users who could potentially hop on the Libra bandwagon.
It's also easy to see why Facebook would do this. It could be a new source of revenue for a company that relies mostly on digital advertising for its income right now. Facebook could benefit financially from becoming even more of an e-commerce platform than it already is.
Finally, it's perhaps the easiest to see why people might be skeptical of this. Facebook's track record on privacy is notably poor and some might not trust the company to do this correctly. This could also make Facebook look like even more of a monopolistic titan to those who want the company to be broken up, like co-founder Chris Hughes.
Topics Facebook Social Media Cryptocurrency
