We’ve known for a while now that Facebook formed its own blockchain team, and several reports said the company was working on a Bitcoin-like cryptocurrency that could be used for money transfers over its chat apps, like WhatsApp and Messenger. But Facebook’s crypto plans might be a lot bigger than that. According to a new report, the company is looking to build a massive online payment system that could rival the one’s currently in place.
Facebook has been talking to “dozens of financial firms and online merchants,” The Wall Street Journal says, looking to kick-start its online payments system that would rely on a stablecoin type of cryptocurrency.
Stablecoins, unlike most digital coins, are pegged to the US dollar, which means they should not see any fluctuations in value. We don’t have an official name for Facebook’s coin, and the company isn’t ready to make any announcements, but the Journal refers to the project as Project Libra.
Facebook has been in talks with financial institutions including Visa, Mastercard and payment processor First Data as it seeks out some $1 billion in investments for the project. The company is negotiating with e-commerce companies and apps about accepting the unnamed digital currency, and these companies could also invest in Facebook’s project. Merchants would also benefit from adopting the new payment standard by not having to pay typical fees associated with credit card transactions.
Facebook is said to be toying with the idea of awarding fractions of a coin to users when they view ads and interact with content on its platforms. One other idea that’s currently being considered is to allow users to pay for a product with Facebook tokens after clicking on an ad. The retailer could then use those tokens to pay for more ads on Facebook.