The giant social media platform, Facebook has once again shown that it is not backing out from its plan to make a landmark entrance to the cryptocurrency industry. While earlier reports suggested that Facebook will only develop a stablecoin, it turns out that the company is building an entire cryptocurrency payment ecosystem.
According to a May 2 report by the Wall Street Journal, Facebook has engaged in several discussion panels with the various companies in the financial sector including Visa, Mastercard, and other reputable online merchants to back its blockchain-based payments system.
Citing a source familiar with the case, the social media platform will also use its planned partnerships to make it easier to raise the sum of $1 billion for the Facebook Coin it plans to unveil.
Moving further, WSJ suggests that the social media giant has actively worked on the stablecoin-based payment system dubbed “Project Libra” for a period of 12 months, and may be closer to launch than expected.
The Project Libra initiative supposedly will ensure a seamless development of the proposed cryptocurrency to enable Facebook’s billions of users to transfer funds to each other, and also make online purchases.
Additionally, the firm is reviewing the possibility of a program that rewards users a fraction of the cryptocurrency for engaging with contents. Users can also earn the tokens by checking on ads while advertisers can use the token to pay for ad placements within the platform.
Facebook, reaching out to Visa, Mastercard, and other firms including the financial services company, First Data Corp. is a bid to raise the budgeted $1 billion as collateral to ensure its stablecoin will buffer against volatility. Further talks with various e-commerce companies, on the other hand, is not just to raise funds, but to also to gain their approval and support for the planned Facebook coin.
A Rival for Card Services?
Interestingly, WSJ notes that Facebook’s proposed stablecoin aims to eliminate the card and swipe processing fees, which cost merchants about 2–3 percent for every transaction to payments processors, banks and networks.
The rumored Facebook coin will boast a significantly low transaction fee with other proposed benefits that could see its usage beat that of existing payment networks.
“If it succeeds, the project threatens the card networks’ dominance over global payments,” the WSJ added.