Facebook plans to launch a cryptocurrency called Libra next year as part of its wider efforts to expand beyond social networking into e-commerce and global payments.
The social media company says it has linked with 28 partners to form Libra Association, a Geneva-based entity governing its new digital coin, which it will launch in the first half of 2020.
Facebook also created Calibra, a subsidiary which will offer digital wallets connected to messaging platforms Messenger and WhatsApp to save, send and spend Libras, which will be backed by government-backed assets.
The California-based company has big aspirations for Libra, but consumer privacy concerns or regulatory barriers may present significant hurdles.
Facebook hopes it will not only power transactions between established consumers and businesses globally, but offer non-banking consumers access to financial services.
David Marcus, a former PayPal executive who heads the project for Facebook, said the name "Libra" was inspired by Roman weight measurements, the astrological sign for justice and the French word for freedom.
"Freedom, justice and money, which is exactly what we're trying to do here," Marcus said.
Facebook also appears to be betting it can squeeze revenue out of its messaging services through transactions and payments, something already happening on Chinese social apps like WeChat.
Facebook, whose shares gained 0.3 per cent, faces a public backlash over a series of scandals, and its new venture may face opposition from privacy advocates, consumer groups, regulators and lawmakers across the world.
Some have called for Facebook to incur penalties, or be forcibly broken up, for mishandling user data, and not preventing Russian interference in the 2016 US presidential election through a social media disinformation campaign.
French Finance Minister Bruno Le Maire was among those concerned about the move by Facebook, and said he had asked the heads of the central banks of G7 countries to write a report on the issue by mid-July.
"This instrument for transactions will allow Facebook to collect millions and millions of data, which strengthens my conviction that there is a need to regulate the digital giants," he said in an interview on Europe 1 radio.
Facebook has engaged with regulators in the United States and abroad about the planned cryptocurrency, company executives said. They would not specify which regulators.
The Australian Competition and Consumer Commission told SBS News: “we’re aware of this announcement and will monitor developments to see if any competition concerns arise.”
