Facebook: Cryptocurrency Backing from PayPal and Uber

Facebook (FB) is preparing to unveil its cryptocurrency this week. The company plans to launch its cryptocurrency next year, according to a report from the Wall Street Journal. The report stated that Facebook is assembling a consortium that will govern its digital currency. The consortium consists of more than 12 companies including PayPal (PYPL), Uber Technologies (UBER), MercadoLibre (MELI), Visa (V), and MasterCard (MA). Each of the consortium members will invest ~$10 million to be part of Facebook’s digital currency.

PayPal’s involvement in Facebook’s cryptocurrency project is interesting. The company has mainly given cryptocurrencies a wide berth. While Square (SQ) runs a bitcoin exchange platform where people can come to buy and sell the famous cryptocurrency, PayPal doesn’t touch bitcoin right now.

Facebook’s digital currency will be called “Libra.” People will be able to use the currency to settle payments with merchants on the Internet. To ensure that Libra’s value is stable, it will be pegged to a basket of fiat currencies. Earlier in June, CNBC reported that Facebook employees will be able to take the company’s digital currency as their salary.

The digital currency is expected to open up another revenue stream for Facebook. Currently, the company relies heavily on advertising dollars. Advertising accounted for 99% of Facebook’s total revenues in the first quarter.