Facebook, the social media giant that's found itself caught in a web of scandals over recent years, is gearing up to release details of its much-hyped potential rival to the world's biggest cryptocurrency, bitcoin, with a white paper detailing plans for Facebook Libra expected later today.
The bitcoin price has surged over the last few months as interest in payments from the likes of Facebook, other major social media platforms, and some of Silicon Valley's most valuable companies sparks a fresh wave of crypto mania after the bitcoin price slumped sharply throughout 2018.
Facebook Libra, a potential rival to bitcoin, has reportedly secured backing from the likes of ride-hailing app Uber, music streaming service Spotify, and payments giant Visa. While Facebook Libra, which has also been linked to the name GlobalCoin, might compete directly with bitcoin and other major cryptocurrencies, many have taken it as an endorsement of bitcoin's core technology and value.
Elsewhere, Facebook's social media rival Twitter is looking to bitcoin itself as the potential "future of internet money," with chief executive Jack Dorsey last week reiterating his faith in bitcoin and beginning to make cryptocurrency hires at his payments company Square.
Facebook's bitcoin rival will likely be a so-called stablecoin, pegged to the U.S. dollar and other major currencies, and is expected to be integrated as a payment tool on Facebook's popular messaging apps WhatsApp and Messenger, and photo-sharing app Instagram.
Facebook will reportedly cede control of the bitcoin rival to "an independent foundation" in an effort to both deflect accusations of centralization and soothe financial regulators.
"Facebook is essentially trying to create a stable medium of exchange that can be used for making payments across its networks and therefore across borders. Think the current functionality of Wechat, Venmo and PayPal but instead of transacting pounds and dollars, users will be transacting in Facebook’s Libra," said George McDonaugh, chief executive of cryptocurrency and blockchain investment firm KR1.
"Facebook’s Libra will not compete with bitcoin but rather validates the underlying blockchain technology more than ever. Bitcoin is open, borderless, permissionless, censorship-resistant, publicly verifiable and immutable. Facebook’s coin cannot be any of these things."
Bitcoin has again broken its year-to-date highs over the past 24 trading period, climbing to $9,478 on the Luxembourg-based Bitstamp exchange and coming within spitting distance of the psychological $10,000 mark for the first time since May last year.
Bitcoin traders and investors are looking ahead to next year's bitcoin halvening event which will see the daily bitcoin supply cut by half overnight, with some predicting this will cause a "supply shock."
For now, cryptocurrency traders are piling into litecoin ahead of its own halvening event, expected in August. The litecoin price is up more than 300% since the beginning of the year as investors bet the coming supply squeeze will push prices higher.
