Facebook Working on Digital Asset Payment System, Project Libra
After a series of rumors, Facebook confirmed its work on a digital asset payment system, under the name Project Libra.
Facebook is gathering a team of experts, including financial firms and online merchants, to launch its own payment system based on a native digital asset, the Wall Street Journal reported. The news of Project Libra, the working name chosen, arrives after weeks of speculation regarding Facebook’s approach to digital assets.
The inclusion of Facebook would mean a brand new digital coin, with instant widespread adoption. However, Facebook’s coin would be something of an outsider to the world of digital assets, as it would be created by a known entity, relying on centralized decisions.
Facebook plans to launch its digital asset with a full ecosystem. While the creation of a coin may be trivial technologically, the inclusion of partners and merchants is a whole different matter. Facebook is using its influence to attract merchants and financial firms, as well as seeking partnerships with VISA and Mastercard to achieve a complete payment system.
To realize its project, Facebook expects the partners to also finance Project Libra, seeking $1 billion from participating firms. The system will aim to invite merchants by removing credit card fees. The new digital asset would, in effect, join the growing list of dollar-pegged stablecoins, which are a technique of circumventing traditional banking while avoiding the volatility of a freely traded asset.
Facebook may also link the digital asset to its ad engine, turning the coin into a reward for viewing ads. Paradoxically, before taking on its own digital asset project, Facebook was hostile to cryptocurrency-related ads, enforcing a temporary ban of crypto-related ad content.
Other social media and chat coins have been proposed previously, though based on public blockchains. Coins with similar use cases include Basic Attention Token (BAT). In the past, tokens such as Status Network (SNT) have attempted to become a widely used in-chat token. The KIN token by the Kik chat app is also lagging behind, after confusion and volatility caused by launching the asset on a public blockchain and making it tradable on free exchanges.