Facebook to unveil Uber and Visa-backed cryptocurrency, challenges Bitcoin

Facebook challenges Bitcoin with Libra

In March, The Burn-In reported Facebook was planning to diversify its offerings by breaking into the cryptocurrency market. Now, the social media giant is preparing to announce the 2020 launch of its digital coin. Furthermore, the service has reportedly convinced several major corporations to back its latest endeavor.

Facebook’s Cryptocurrency  Plans

Last Friday, The Verge revealed Facebook would announce its cryptocurrency venture to the world on June 18. The firm reportedly intends to call its digital coin “Libra.” The platform wants to launch it as a stablecoin by tying its value to government-issued currency. The corporation is targeting consumers from developing nations that lack financial solidity.

Facebook also plans to interpolate Libra into all of its Messenger and WhatsApp products so users can make purchases and send money through the platform. Additionally, the company wants to set up ATM-like devices that will allow consumers to convert their local currency into Libra.

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In March, Facebook CEO Zuckerberg indicated the company was preparing to interpolate Facebook, Instagram, Messenger, and WhatsApp, but he didn’t mention cryptocurrency at the time.

Surprising Investors

According to The Verge, Facebook has enlisted a diverse and surprising array of investors for its new offering. The firm has reportedly received $10 million in investments from online business heavyweights Booking.com, PayPal, Stripe, and Uber. The corporation has also apparently secured the backing of worldwide payment processors Visa and Mastercard.

On its face, it may seem odd for two of the world’s biggest financial services companies to put their money behind a new cryptocurrency. Indeed, most popular digital coins were explicitly created to avoid governmental and corporate oversight. However, the two firms may be taking a broader view of the situation. In backing the new digital currency, they’ll own part of a payment company with 2.4 billion potential customers.

Regulatory Challenges

It’s also worth noting Facebook is getting more than a cash injection from its new partners. The corporation is reportedly requiring each of its investors to join the Libra Association, the body that will oversee the cryptocurrency independent of the social platform. Given all the flak the company’s received for its perceived lack of accountability, establishing a regulatory board of trusted brands is a smart move.

Furthermore, the platform wisely discussed Libra with representatives from the U.S. Treasury and the Bank of England. However, Facebook may encounter serious pushback from the very markets it wants to target.

In April, the Indian government announced plans to draft a bill banning all cryptocurrencies from being traded in the country. New Delhi’s position is that cryptocurrency providers have lured individuals and businesses in with false promises of vast financial returns.

Facebook will likely pull out all the stops to overcome the Indian government’s objections to cryptocurrency trading. Last year, the World Bank reported India led the world in diaspora remittances with $79 billion. If the company could become the default provider for those transactions, it could validate Libra’s existence in a year. However, the local government may demand the firm provide access to its users’ private messages in exchange for access to such a lucrative market.

Sadly, with so much money on the line, it’s hard to imagine Facebook not trading away consumer privacy once again.