Facebook's cryptocurrency gets $10m each from Uber, Paypal, Mastercard and Visa

Facebook's cryptocurrency-based payments system gets big backers- WSJ

Facebook's cryptocurrency-based payments system gets big backers- WSJ

Facebook Inc has enlisted more than a dozen companies including Visa Inc, Mastercard Inc, PayPal Holdings Inc and Uber Technologies Inc to back its new cryptocurrency, the Wall Street Journalreported on Thursday. Sources revealed to the publication that, to avoid volatility, the digital coin will be linked to a number of government-issued currencies.

Facebook counts more than 2 billion users worldwide, many of whom come from developing countries and are unbanked. The involvement of Visa and Mastercard is interesting as cryptocurrency can act as a viable alternative to the services offered by these firms and could be direct competition, some have suggested that the firm's involvement is an attempt to keep track of Facebook's currency, while others have implied alternative motivations. As the Journal report pointed out, these companies stand to benefit if Libra actually takes off.

Talks with some of the partners are ongoing, and the group's eventual membership may change, the people added.

A Facebook spokesperson declined to comment.

It has been a decade since bitcoin was born, yet consumers hardly use it or the hundreds of other cryptocurrencies to pay for things. "It is still not entirely clear, even to some members of the consortium, how the coin will work or what their roles will be", wrote the Journal. If all goes according to plan, Facebook will purportedly secure $1 billion from the 100 participants as it is reportedly charging each member $10 million to manage their own node. Regulatory hurdles in the US and elsewhere are high.

Neither the governing body, called the Libra Association, nor Facebook will directly control the coin, according to the Journal.