Some of the world’s biggest companies have come together to create their own cryptocurrency that they hope will rival the US dollar, a decade after the launch of bitcoin.

The Libra is backed by 28 companies including the likes of PayPal, Mastercard and Visa and will be launched by Facebook on WhatsApp, Messenger and other apps to allow people to spend and receive money through their phones.

“Technology has made almost everything more accessible, except money,” a video announcing the Libra cryptocurrency states. “1.7 billion are unbanked. That’s 31 per cent of the global population. For those who do have access transfers are slow. A typical cross-border payment takes three to five working days to complete [and] costs are high.”

It is claimed that Libra will be able to solve these issues of traditional currencies, while also overcoming the obstacles that have prevented bitcoin and other major cryptocurrencies from achieving mass adoption.

Facebook’s David Marcus, who spearheaded the development of Libra, said the mission of the new cryptocurrency is to create “a simple global currency and financial infrastructure that will empower billions of people”.

Facebook birthday: 15 defining moments for the social network Show all 15 1 /15 Facebook birthday: 15 defining moments for the social network Facebook birthday: 15 defining moments for the social network Facebook is born On 4 Feb, 2004, 19-year-old Harvard student Mark Zuckerberg launched a website called 'TheFacebook' from his dorm. Within 24 hours the college social network had more than 1,000 users Wikimedia Commons Facebook birthday: 15 defining moments for the social network Winklevoss twins sue Zuckerberg Within one week of launching, fellow Harvard students Cameron Winklevoss, Tyler Winklevoss and Divya Narendra accused Zuckerberg of stealing their idea. It would be four years later when the resulting lawsuit was finally settled Facebook birthday: 15 defining moments for the social network Open for business The social network finally opened it platform to everyone on 26 September, 2006. The move proved the catalyst in supercharging the site's already explosive growth PA Facebook birthday: 15 defining moments for the social network Billion-dollar bid Yahoo offered $1 billion to buy Facebook in September 2006 but Zuckerberg turned it down. 'I don’t know what I could do with the money,' Zuckerberg reportedly said. 'I’d just start another social networking site' Reuters Facebook birthday: 15 defining moments for the social network In the money In September 2009, almost five years since the site launched, Facebook turned a profit for the first time Getty Images/iStockphoto Facebook birthday: 15 defining moments for the social network Taking the lead Facebook overtook MySpace in 2010 to become the world’s most popular social network Facebook birthday: 15 defining moments for the social network Taking on the tech giants In 2011, Google launched its own social network that it hoped would knock Facebook from its perch. Despite its initial success, Google+ ultimately failed and will be shut down completely in 2019 Getty Facebook birthday: 15 defining moments for the social network Facebook goes public On 18 May, 2012, Facebook went public. The initial public offering raised $16 billion – the third largest in US history Facebook birthday: 15 defining moments for the social network Gobbling up the competition Facebook acquired Instagram in April 2012 for $1 billion, consolidating its position as the world's leading social network Reuters Facebook birthday: 15 defining moments for the social network One billion users On 4 October, 2012, Zuckerberg announced that Facebook had hit 1 billion users. 'If you’re reading this: thank you for giving me and my little team the honour of serving you,' he wrote in a blog post Getty Images Facebook birthday: 15 defining moments for the social network Expanding its empire In February 2014 Facebook acquired the messaging app WhatsApp for $19.3 billion REUTERS/Dado Ruvic Facebook birthday: 15 defining moments for the social network Two billion users In June 2017, Facebook passed the 2 billion user milestone REUTERS/Dado Ruvic Facebook birthday: 15 defining moments for the social network Privacy scandal On 17 March 2018, news broke that UK firm Cambridge Analytica had harvested data from around 87 million Facebook users for the purpose of political profiling in the build up to the 2016 US presidential elections Shutterstock Facebook birthday: 15 defining moments for the social network Record profits Despite the scandals and subsequent #DeleteFacebook campaign, Facebook posted record profits just before its 15th anniversary, the equivalent of $7.37 from each of its 2.32 billions users iStock/Independent Facebook birthday: 15 defining moments for the social network Unhappy users A study found that people are happier when they don’t use Facebook, adding to mounting evidence surrounding the impact social media has on mental health Rex Features

A recent report from London-based bitcoin exchange Luno suggests that a new global cryptocurrency could fill the gaps that both traditional currencies like the US dollar and cryptocurrencies like bitcoin fail to fill. The Future of Money survey found that developing markets would be quicker to adopt a currency like Libra than more developed countries.

“Our research shows that in these markets people are more financially savvy because they have to be, which means that they need and understand the benefits the new coins can offer,” said Marcus Swanepoel, Luno’s chief executive. “If a cryptocurrency can provide a secure and cheaper means of exchanging value, better than the existing system, it will be used.”

The new cryptocurrency had been widely rumoured since early 2018, when Facebook set up its own blockchain group to explore ways to utilise the technology.

With more than 2 billion users of Facebook-owned apps around the world, many have heralded Libra’s potential to become the world’s first mainstream cryptocurrency, however others have questioned the motives behind the initiative.

Value stability

Unlike bitcoin, the value of Libra is tied to a collection of currencies in order to prevent price volatility – one of the main reasons people cite when explaining why bitcoin is unsuitable for use as a mainstream currency.

Despite several major retailers accepting bitcoin, the world’s first cryptocurrency has become more commonly used as a store of value or speculative investment.

It is hoped the Libra can ‘empower billions of people’ (Libra/iStock/The Independent) (Libra/ iStock/ The Independent)

Libra is not the first so-called stablecoin, with a Goldman Sachs-backed startup among several other cryptocurrency projects that have used this method to prevent huge price jumps. But it will be the biggest and most ambitious to date.

“Libra will be a very different beast to bitcoin as it is pegged to a basket of currencies, and as a result it will be a lot less volatile and will be viewed more as a currency as opposed to a store of value,” said Giles Hawkins, a partner at Ashfords Solicitors.

‘Invasive and dangerous’

The launch of Libra comes at a turbulent time for Facebook, following just over a year after the Cambridge Analytica scandal exposed the private information of tens of millions of its users. Since then, the tech giant has been plagued by a series of data breaches that has fundamentally undermined trust in Facebook and its accompanying apps.

Critics of the new cryptocurrency include Phil Chen, a blockchain expert who pioneered the world’s first cryptocurrency-enabled smartphone for HTC. Mr Chen claims Facebook’s involvement means Libra is “the antithesis of bitcoin” and another step towards total control of data and users.

“If you’re concerned with Facebook knowing too much or having too much access to your private data, well this global coin is the most invasive and dangerous form of surveillance they have designed thus far,” Mr Chen told The Independent.