Facebook cryptocurrency to be unveiled tomorrow; Mark Zuckerberg led company to invest $10 million

Social media giant Facebook has announced that it will unveil a cryptocurrency on Tuesday. Reportedly, this is with the endorsement of governments and financial giants. Facebook believes that virtual currency which is expected to be launched next year will avoid the rollercoaster volatility of "blockchain" technologies such as bitcoin. For this, Facebook is setting up a consortium called "Libra" which, according to the Wall Street Journal, has been joined by more than a dozen companies including Visa, Mastercard, PayPal and Uber.

The companies along with venture capitalists and telecommunications firms will reportedly invest around USD 10 million each into the consortium. The Journal added that the consortium will be managed externally and will seek to build trust among consumers by pegging the virtual coin to a basket of currencies including the dollar and euro.

Earlier it was reported that Facebook had sought blessings from the US Treasury and the Bank of England. Several regulators have been watchful about cryptocurrencies because of potential abuse by criminals due to the wild swings in their value harming consumers. Facebook has more than two billion users across its platforms that include WhatsApp and Instagram. 

It can follow the footsteps of WeChat, which in China, allows its users to chat, shop and play games without leaving its platform, generating more revenue by offering a one-stop portal. In the past, Mark Zuckerberg has promised a new direction for Facebook built around smaller groups, private messaging and payments.

Analysts believe that Libra consortium will help the platform to overcome challenges of trust and privacy. Facebook's crypto initiative could facilitate shopping, applications and gaming, and would leverage its broad user base in Asia, RBC analyst Mark Mahaney said in a research note last week. It "may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams", he wrote.