Facebook, the world's biggest social network, announced on Tuesday that it is working on a project to make its own digital currency.
It named the new blockchain-powered cryptocurrency 'Libra'.
Libra is scheduled to launch in the first half of 2020 along with Calibra, a management tool Facebook has created to offer digital wallets to buy things online with Libra and send wire transfers across its platforms such as the Messenger and WhatsApp.
The motivation behind this is to create a simple global currency and financial infrastructure that empowers billions of people as well as offering access to financial services to consumers who don't use regular banks.
"In many ways it's an important phase in terms of where these things are going because there is that unbanked population and that unbanked population should be banked and there are a lot of problems that this will alleviate for this unbanked population such as small transactions, foreign transaction fees."
But there are concerns over privacy and transparency as Facebook is currently under federal investigation over its privacy practices.
Facebook has pledged not to share Calibra users' financial data with Facebook or use it for targeted advertising.
The currency will be governed by an independent organization called the Libra Association formed by 28 founding partners including payment firms Visa and Mastercard and internet companies eBay, Spotify and Uber.
"I think they believe that decentralization, this idea of centralized parties going away in favor of decentralized networks, is a trend that is happening in the world and that they need to be a part of that or they'll be left behind. And so this is their effort to go and reach that."
With more than 2.4 billion active Facebook users, watchers say Libra could gain a more mainstream audience than other cryptocurrencies such as Bitcoin.
Hong Yoo, Arirang News.