Facebook’s getting into the cryptocurrency business – and it’s bringing some of the biggest names in payments with it
Later today, social media giant is expected to offer more details on one of the biggest pieces of technology news to break this month: that it’s launching its own cryptocurrency next year. The technology titan is looking to bring the fintech innovation into the mainstream, and it has the backing of some serious players, including governments and financial giants. It’s also partnering with companies that know the ins-and-outs of the payment world, including Visa, Mastercard, and PayPal.
Facebook’s share price has appreciated by 41% so far year to date
Source: Yahoo Finance
According to the Wall Street Journal, Facebook is setting up a consortium of companies called Libra that will each put $10 million (as well as their expertise) into the pot. In addition to the companies named above, Uber is a known participant. This consortium will be joined by a collection of venture capitalists and telecommunications firms, who will each contribute a similar amount of money. Managed externally, this consortium will operate the cryptocurrency, and seek to build trust with users through pegging it to a basket of currencies including the dollar and the euro.
This move is undoubtedly an attempt on Facebook’s part to quell the kind of volatility that block chain-based offerings like Bitcoin have witnessed. An additional signpost of credibility is the blessing of the US Treasury and the Bank of England, according to the BBC.
Facebook is a giant in every sense of the word. It is worth hundreds of billions of dollars and has more-than two billion users all around the world. That means it could have the clout necessary to make cryptocurrencies a major part of the payments network.
In a note last week, RBC analyst Mark Mahaney told investors that this move “may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams.”
Dominion holds Facebook (as well as Visa, Mastercard and PayPal) in its Global Trends Ecommerce Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.