Facebook’s plans to introduce a blockchain-based payment system and an accompanying cryptocurrency are apparently kicking into overdrive. According to a report by the Wall Street Journal, the company has begun to recruit financial firms and merchants to assist in the launch of its crypto payments system, which is reportedly being dubbed Project Libra.
Facebook has been in touch with Visa and Mastercard, as well as First Data Corp, a payment processor, according to sources. It is also looking to receive around $1 billion in investment funds, which would be used to protect the company’s new digital currency, the Facebook Coin, from volatility. The social media giant is also apparently in discussion with ecommerce merchants about accepting the coin and is willing to accept small investments from those merchants to help it reach its investment goal.
How the system will play out isn’t completely understood. Facebook has been relatively silent, offering only that it is exploring different options. There has been talk that users could earn crypto for their activity on the platform—as well as for watching advertising—and that the system would allow for crypto transactions across a variety of platforms owned by Facebook, including WhatsApp, Messenger and Instagram.
In a blanket statement offered by Facebook previously, it only stated, “Like many other companies Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
One of the biggest concerns being raised is whether or not Facebook will be able to manage a blockchain solution adequately. Its track record of protecting customer data is anything but stellar and it has repeatedly suffered breaches or internal glitches that have exposed the personal information of millions of its customers. There is nothing to say that the same wouldn’t happen with a blockchain project such as Libra.
However, some argue that the only way for Facebook to overcome its issues is by embracing the blockchain. One of these is Henry Liu, a former company employee who is now a managing partner of blockchain investment firm YGC. He argues, “Payments and commerce are Facebook’s only way out from its freemium, advertisement business model.”
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