Facebook’s cryptocurrency project has garnered more than a dozen partners who will each contribute $10 million for the creation of a new coin on its social network, a WSJ report states. Included among the partners are financial services behemoths like MasterCard Holdings, Visa Inc., and PayPal Inc. Rideshare company Uber technologies is also named in the report. Stripe.com, a payment processing company on the Internet, an Argentinian e-commerce site and Booking.com have also signed on.
Facebook was looking to raise $1 billion for a stablecoin –a cryptocurrency that maintains a stable value with respect to a fiat currency or a basket of goods. The coin would be used to purchase goods and services on the social media’s network, which consists of 2.4 billion users around the world. In addition to this, member companies will also become part of a governing foundation responsible for the coin. The foundation will be called the Libra Association, according to the WSJ report.
Some members will act as nodes in the blockchain network underpinning Facebook’s cryptocurrency. Nodes are responsible for approving each transaction and are expected to hold data relating to each transaction on the network. Some commentators have opined that data access to Facebook’s massive user network may be one of the reasons that the company was asking for a licensing cost of $10 million for each node.
A successful raise for a non-profit foundation also means that Facebook will be able to separate its operations for social media and cryptocurrencies and deflect regulatory scrutiny. Besides expanding Facebook’s e-commerce footprint, it will also enable the company to offer ancillary services, such as money transfers, across borders at minimal costs.