REUTERS/Charles Platiau/File Photo

Facebook is working on a secret initiative code-named "Project Libra" to build a cryptocurrency-based payments system, The Wall Street Journal reported on Friday.

The social network plans to launch a digital coin that its users can transfer to one another and spend on Facebook and elsewhere, and it has spoken with "dozens of financial firms and online merchants" as it seeks investment and launch partners, the report said.

Facebook is also said to be working on a virtual checkout that would allow its users to shop on other websites, and it could reward fractions of coins to users who watch ads, engage with content, or make purchases.

Watch Facebook trade live.

Facebook has been working for more than a year on a secret initiative code-named "Project Libra" to build a cryptocurrency-based payments system, The Wall Street Journal reported on Friday.

The social-media giant plans to introduce a digital coin that its more than 1.5 billion users can transfer to one another and spend on Facebook and other websites, the newspaper reported. Facebook has spoken with "dozens of financial firms and online merchants" as it seeks to raise about $1 billion in investment and enlist partners to help launch the system, according to the report, which cited people familiar with the matter.

Facebook declined to comment on the report. "Like many other companies Facebook is exploring ways to leverage the power of blockchain technology," a Facebook spokesperson said in an email to Business Insider.

The social network has courted Visa, Mastercard, and the payment processor First Data, according to The Journal. It has also approached e-commerce companies and apps about accepting its coin and investing in the project, luring them with the prospect of zero card-processing fees.

Facebook plans to back its coin with dollar reserves to stabilize its value and make it less volatile than bitcoin and other cryptocurrencies, according to the report. Introducing a "stablecoin" may also be a response to mounting concerns about the privacy and safety of its users, as cryptocurrencies claim to offer anonymity and security.

There are risks, however, as cryptocurrency deposits have been misused, misplaced, or stolen on several occasions.

The company is also working on a virtual checkout that consumers could use to make purchases on other websites, similarly to how people can use their Facebook credentials to log in to other sites, according to The Journal. It's also considering paying users fractions of a coin to watch ads, engage with other content, or shop on its platform, the report added.

Bloomberg and The New York Times previously reported that Facebook was developing a digital coin to allow WhatsApp users to transfer money.

NOW WATCH: Astronomers just captured the first image of a black hole. Here are the horrifying things that would happen if you fell into one.