Home > News > Visa, Mastercard said to be among early backers of Facebook’s crypto project

Visa, Mastercard said to be among early backers of Facebook’s crypto project

Benson Toti

Facebook Inc has attracted more than a dozen companies to back its cryptocurrency project, The Wall Street Journal has reported.

While the US social media giant hasn’t officially announced the project, multiple media reports have in recent months suggested that the company is developing its own stablecoin – a type of cryptocurrency that is pegged to a fiat currency. Some have speculated that Facebook has been looking for outside investors, as it reportedly wants to raise up to $1 billion to use it as collateral for the coin.

According to a June 13 report in The WSJ, Facebook has already convinced a number of financial and e-commerce companies, venture capitalists and telecommunications firms to back the project. Among the backers reportedly are Visa Inc, Mastercard Inc, PayPal Holdings Inc and Uber Technologies Inc. Stripe Inc, Booking.com and Argentina-based e-commerce website MercadoLibre have also backed the project, according to the report.

Each firm would invest around $10 million into a consortium that would govern the coin, The Journal said, citing unnamed sources familiar with the matter. According to the sources, the money will be used to fund the development of the coin that will be pegged to a basket of fiat currencies, rather than to a single currency like the US dollar.

The latest information on the project appears to be in line with previous reports suggesting that Facebook will not directly control the stablecoin. Individual members of the consortium will also have no direct control over the coin, according to the WSJ report. Some members could serve as nodes in the payment system Facebbook is creating.

Facebook is expected to unveil the cryptocurrency next week and to start testing the stablecoin by the end of this year. The official launch of the coin will happen in the first quarter of 2020, according to reports.

Featured image: Chinnapong /Shutterstock.com

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