Yesterday the Wall Street Journal (WSJ) reported that Facebook’s cryptocurrency project has attracted more than a dozen companies including Visa, Mastercard, Paypal and Uber. Facebook plans to unveil the project next Tuesday although it’s only expected to launch in Q1 2020.
The project, dubbed Libra, has a governing consortium where participants will contribute around $10 million each. Members include financial, e-commerce and telecoms companies as well as venture capitalists. Additional brands include fintech Stripe, travel company Booking.com and Argentinian e-commerce company Mercado Libre.
As previously reported, the GlobalCoin will be pegged to a basket of conventional fiat currencies for price stability. The likely initial vehicle is Facebook’s WhatsApp messaging application.
The excitement around Facebook is because cryptocurrencies to date have been very niche, and the social media giant has the potential to bring it into the mainstream. That said, not everything it touches turns to gold. Its Messenger person-to-person (P2P) payment service will be discontinued in the U.K. and France as of tomorrow. According to Techcrunch, the reason was that it was unpopular.
The story has gradually unfolded and evolved over the last year. Initially, it was thought it would target remittances to India. Our analysis showed this could be challenging as it’s already a competitive market.
A month ago, the WSJ reported that Facebook was talking to Visa, Mastercard and payment processor First Data Corp, and it is targeting e-commerce and rewards.
More recently, the BBC revealed that Mark Zuckerberg, Facebook’s CEO, has met with Bank of England governor Mark Carney to discuss GlobalCoin’s opportunities and risks. The company also had discussions with the U.S. Treasury. Plus it’s talking to Western Union which could provide an onramp for the unbanked.