Facebook is reportedly gearing up to announce its own brand of cryptocurrency next week with the backing of over a dozen major financial organizations.
According to the Wall Street Journal, Facebook’s venture into the cryptocurrency space has been strengthened with the support of companies including Visa, Mastercard, PayPal, and Uber.
In total, the group of backers will invest roughly $10 million each into the venture, the publication says, and these funds will be used for the development of the coin, as well as the infrastructure and blockchain required to support it.
Cryptocurrency, first created as an alternative to mainstream banks and fiat currency, often experiences swings in value in what is usually a turbulent market. However, as traditional financial organizations began to explore the possibilities of virtual coins and the blockchain, the idea of tying virtual to fiat currency has become an option to stabilize value.
In Facebook’s case, the company’s coin will be “pegged to a basket of government-issued currencies,” the WSJ says.
Facebook has reportedly already initiated talks with brokers and banks to allow its future cryptocurrency users to exchange their coins for fiat currency.
Rumors have been swirling around Facebook’s cryptocurrency for months, and it is believed the coin would be used to send funds not only through the social media platform but also for purchases made through partner retail websites in return for transaction fees which are lower than what standard banks offer.
However, nothing has been set in stone and even some of the backers are not aware of their roles in the future cryptocurrency project or the direction Facebook will take.
The consortium of backers is known as the Libra Association and a white paper describing the coin and its blockchain-based infrastructure is reportedly due to be published next week.
In May, it came to light that a new financial services organizations called Libra Networks had been registered in Switzerland by Facebook. The company has been described as a developer of financial technologies, the blockchain, and data analytics.
It is not known whether the cryptocurrency itself will be known as Libra, or whether past reports which cited the name “GlobalCoin” are more accurate. Either way, the formal launch of the cryptocurrency may take place as soon as Q1 2020.