Netease Technologies News June 14, according to people familiar with the situation, Facebook plans to launch its digital currency next week, and has received support from 12 companies, including Visa, MasterCard, PayPal and Uber.
People familiar with the situation said that these financial companies and e-commerce companies would invest about $10 million in the regulatory agencies responsible for managing Facebooks digital currency, respectively. The money will be used to finance the creation of Facebooks digital currency, which will be linked to legal currencies issued by multinational governments to avoid frequent price volatility, as in other encrypted currencies.
The Wall Street Journal reported last month that Facebook is recruiting financial companies and online merchants to help launch a digital money-based payment system, code-named Project Libra, and is seeking to raise about $1 billion.
This secret project has been brewing for more than a year and is mainly centered on digital money. Users can send digital money to each other and use it to buy on Facebook and the Internet.
Negotiations are ongoing between Facebook and some partners, but the ultimate membership of the regulatory body that manages digital money for Facebook may change, people familiar with the matter added. A Facebook spokesman declined to comment.
Bitcoin has been around for ten years, but consumers hardly need it or hundreds of other encrypted currencies to pay for it. Facebook is betting that the digital money-based payment system built around its vast social network and its billions of users will change the situation.
Even for some members of the consortium, it is not entirely clear how the digital currency will work or what role it will play, according to people familiar with the matter. In addition, regulatory barriers are high in the United States and elsewhere.
Some say that many members fear that Facebooks digital currency could be used to launder money and finance terrorist organizations, a long-term problem for Bitcoin and other encrypted currencies.
Facebook does not directly control these digital currencies, nor do individual members of its governing body, the Libra Association. According to people familiar with the situation, some of them can act as nodes of the system to verify transactions and maintain transaction records, thus creating a new payment network.
Some people familiar with the matter said that Stripe, Booking.com, a financial technology company, and Mercado Libre, an Argentine-based e-commerce website, had signed the project, demonstrating the international ambition of Facebooks digital currency project.
Separating the encrypted monetary network from Facebooks platform allows the social media giant to be sheltered by users and regulators when problems arise, which is a huge advantage at a time when Facebook is under pressure to address privacy deficiencies. However, Facebook, as a developer of basic technology, can exert considerable influence on it.
Nevertheless, Facebooks nearly 2.4 billion active users a month are too attractive for many companies to refuse. Credit card companies have long feared that a technology giant might forcibly enter their business and create a payment option to cut off the credit card network. Participation in the Libra program allows them to keep a close eye on Facebooks payment ambitions and share the benefits of the projects appeal to consumers.
According to people familiar with the matter, Facebook plans to release a white paper next week introducing its digital currency in the same format as Satoshi Nakamoto, the creator of Bitcoin. Some people familiar with the matter said that the company had asked members of the consortium to sign the document together. (Small)
Source: Responsible Editor of Netease Science and Technology Report: Wang Fengzhi_NT2541