Facebook's Libra gets big-time backers

Facebook will reportedly announce the launch of its brand of cryptocurrency, Libra, in the coming week backed by more than a dozen major financial organizations. According to the Wall Street Journal, Facebook's entry into the crypto space has enhanced after its collaboration with the support of companies including Visa, Mastercard, PayPal, and Uber. Reports suggest Facebook charged around $10 million from each of these backers to manage Libra's nodes.

The cryptocurrency was created as a substitute to mainstream banks and fiat currency whose value is unstable in the market. However, the idea of tying virtual to fiat currency has become an option to stabilize value after the potential of virtual coins and the blockchain was discovered by traditional financial organizations.

In Facebook's case, the company's coin will be "pegged to a basket of government-issued currencies," the WSJ says. Facebook has already discussed with brokers and banks to allow its users to exchange their coins for fiat currency. The coin will reportedly be used to send funds through the social media platform. It will also be used for purchases made through retail partner websites in return for transaction fees, which are lower than what conventional banks offer. A white paper is reportedly due to be published next week, which will describe the coin and its blockchain-based infrastructure.

The online reaction to this news has been mixed. Sarah Jamie Lewis, the Executive Director of Open Privacy, said in a tweet that went viral:

"Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook."