Tencent Technology News, June 14 news, according to foreign media reports, according to informed sources, Facebook has signed contracts with more than a dozen companies, including Visa, Mastercard, PayPal and Uber to support the social media giant plans The new cryptocurrency introduced in the week.
People familiar with the matter said that these financial companies and e-commerce companies will invest about $10 million in a consortium that manages digital currencies for Facebook. They said the funds will be used to fund the creation of the digital currency and support its linking with government-issued fiat currencies to avoid the effects of factors that plague other cryptocurrencies and cause volatility.
According to media reports, Facebook is recruiting financial companies and online merchants to help launch a cryptocurrency-based payment system and seek to raise about $1 billion for the code-named "Libra project". This secret project around digital currency has been around for more than a year, and its users can send digital currency to each other and use it to make purchases on Facebook and the Internet.
Informed sources added that Facebook's negotiations with a number of partners are underway and that the final members of the consortium that manages its digital currency may change. A Facebook spokesperson declined to comment.
Bitcoin has been around for ten years, but consumers rarely use bitcoin or hundreds of other cryptocurrencies to pay for it. Facebook is betting on digital currency because it believes it can change that by building a cryptocurrency-based payment system around its vast social network and billions of users.
According to people familiar with the matter, even for some members of the consortium, how this digital currency will operate and what role they will play is still not fully understood. Regulatory barriers are high in the United States and elsewhere.
Some people say that many US lawmakers are concerned that digital currency may be used to launder money and finance terrorist organizations, which is a persistent problem with Bitcoin and other cryptocurrencies.
Facebook does not directly control this cryptocurrency, nor does it directly control the consortium members known as the Libra Association. According to people familiar with the matter, some members can act as a “node” of the system, check transactions and maintain transaction records to create a new payment network.
Some have revealed that the financial technology company Stripe, the travel booking site Booking.com and the Argentine e-commerce site MercadoLibre have signed the project, indicating the ambition of the project to expand to the rest of the world.
If there is a problem, separating the cryptocurrency network from the Facebook platform will provide the social media giant with the potential to avoid criticism from users and regulators, which is a big advantage as it faces pressure to address privacy flaws. However, as a developer of the underlying technology, Facebook may have a considerable impact on it.
Despite this, Facebook's nearly 2.4 billion active users per month are too attractive and many companies are reluctant to miss it. For a long time, credit card companies have been worried that technology giants may force them into their business, creating a payment option that cuts off the credit card network. Joining the “Libra Project” allows them to keep a close eye on Facebook's payment ambitions while sharing the benefits of the project being attractive to consumers.
According to people familiar with the matter, Facebook plans to release a white paper introducing its digital currency next week, using the format promoted by the bitcoin alias creator Satoshi Nakamoto. The people familiar with the matter said that the company had asked the consortium members to sign the document together. (Tencent Technology Review / Jinlu)