Facebook Reportedly Still Working on Building Its Own Cryptocurrency

For months one of the big rumors has been that Facebook was developing a cryptocurrency that could be used for payments on its platform. While these plans still aren’t confirmed, we are seemingly getting a better idea of what this would look like. According to the Wall Street Journal, Facebook is continuing talks with various potential partners in a bid to achieve e-commerce dominance.

The effort to bring the digital currency to fruition is reportedly being referred to as “Project Libra” within Facebook and finds the social network seeking investments from outside firms. In fact it’s said that the company is looking for $1 billion to help launch the coin. To help raise that, sources say Facebook has held discussions with such players as  Visa, Mastercard, and First Data. Apparently these funds would be used to help stabilize the price of the potential coin to help prevent the volatile swings other cryptos such as Bitcoin have famously endured. Beyond their search for funding, Facebook has also been reaching out to various e-commerce sites and apps about accepting their crypto as a form of payment.

Among the many benefits Facebook is pitching with their plan is the ability to entice sellers by offering lower fees. Currently, most e-commerce platforms take 2% to 3% from each sale to cover processing fees and more. However, by cutting out credit card swipe fees, Facebook could provide merchants with better terms that would, in turn, help grow the site’s e-commerce. As for users, Facebook is also said to be looking at plans to pay consumers for viewing ads, making purchases, and more — creating a loyalty program of sorts.

Of course, as WSJ notes, there are a few things working against Facebook and their cryptocurrency dream. For one the company has been regularly scrutinized from multiple sides as of late for everything from privacy to free speech. Furthermore cryptocurrencies haven’t fared much better in the public eye due to hacks, accusations of fraud, etc. As a result it may seem bold for a company staring down regulation to expand into a sector facing its own regulatory issues.

On the other hand the advantages Facebook would enter with aren’t to be understated. With more than 1.5 billion active monthly users, there’s already a strong market for any coin the company cooks up. The Journal also points out that Facebook’s efforts to create a stablecoin backed by fiat currency might also help sway regulators who might otherwise be concerned.

As mentioned Facebook has yet to officially comment on any other these plans, other than to say that they’re “exploring many different applications” of blockchain technology. Despite that this seems like one rumor that will only grow louder in the coming months. Given the size of Facebook’s reach, the impact a proprietary coin could have on e-commerce and cryptocurrency adoption is huge. Now the only question is, will it happen?

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...

Marqeta Expands Credit Program with New APIs and More

A FinTech that specializes in creating credit card experiences is rolling out some new features. This week, Marqeta announced what it calls a "significant expansion" of its credit platform. This includes more than 40 new credit APIs that will further help clients craft and launch their own credit card products. Additionally, the company notes an updated intuitive dashboard. Using this platform, businesses can create unique card options that can not...