Facebook Inc revealed lofty plans to establish a cryptocurrency called Libra in June, but the project quickly ran into trouble with sceptical regulators around the world.
France and Germany pledged to block Libra in Europe and backed development of a public cryptocurrency instead.
Facebook plans for Libra to launch in the first half of 2020 and be run by an association of other corporate investors and non-profit members.
Here are some details:
Libra will be a digital currency backed by a reserve of real-world assets, including bank deposits and short-term government securities, and held by a network of custodians.
The structure is intended to foster trust and stabilise the price.
Although Libra prices may not always align with the underlying assets, holders should have a "high degree of assurance" that they can convert coins into traditional currency based on an exchange rate, according to the project's information.
Libra will trade on a network of exchanges, which Facebook did not identify.
Libra transactions will be powered and recorded by a blockchain, a shared ledger of transactions maintained by a network of computers. The Libra blockchain will be permissioned, meaning only entities authorized by the governing association will be able to run the computers. Its governance differs from bitcoin, which does not have an entity in charge.
The software will be "open source," meaning companies outside the association can build applications on top of it.
The association plans to move towards a permissionless blockchain within five years of Libra's launch.
The Libra Association is a 21-member independent non-profit based in Geneva, Switzerland. It will oversee major decisions about the digital coin. Members include Uber Technologies Inc and Vodafone Group Plc, as well as venture capital firms Andreessen Horowitz and Thrive Capital.
However, the group suffered a serious setback in October, when several high-profile financial companies, including Mastercard, Visa and PayPal abandoned the effort. There is a minimum $10 million (£7.8 million) investment to join, except for non-profit members like financial inclusion group Kiva.
The association aims to have 100 members by launch. Each will have one vote on important issues. Facebook will be a member via Calibra, a newly created subsidiary that will offer a digital wallet for Libra.
Individuals and merchants will be able to use Calibra to store, send and receive Libras. It will be available as a standalone app on smartphones, as well as a button within Facebook's Messenger and WhatsApp products.
Facebook eventually wants to make Calibra available for transactions across its family of apps, such as digital checkouts for purchases on Instagram.
The company appears to be betting it can squeeze revenue out of its messaging services through transactions and payments, something that is already happening on Chinese social apps like WeChat.
Executives envision users purchasing Libra through the app either by linking a bank account or, for people without banks, at physical locations like cash transfer businesses and convenience stores.
Calibra engineers are involved in building the blockchain, though Facebook says it intends to keep the currency and the wallet in separate entities.
Calibra has about 100 employees, mostly based at Facebook's headquarters in Menlo Park, California, as well as in Tel Aviv. Calibra executive Kevin Weil told Reuters he did not foresee a dramatic expansion beyond that headcount.
PRIVACY AND SECURITY
Every person who uses Calibra will have to go through a "know your customer" process, which verifies user identities to prevent financial crimes. That means anyone who signs up must share a government ID and other personal information.
Calibra will provide support to customers who lose phones or passwords and refund customers whose Libras are stolen by fraudsters, Facebook said.
Calibra will only share user data with parent company Facebook and third parties when it has customer consent, or in other "limited cases," such as when law enforcement requests information, according to a statement.
Facebook pledged not to use Calibra data to improve ad targeting.
Businesses will see the same information about customers who pay with Libra as they do about customers who pay with credit cards, Weil told Reuters.
Regulators have raised eyebrows about the Libra project since its launch, citing concerns about its impact on the financial system, user privacy and its potential for use in money laundering. The Group of Seven advanced economies warned in July that it would not let Libra proceed until all regulatory concerns had been addressed.
U.S. authorities have also expressed caution. Federal Reserve Chairman Jerome Powell said the project raises "serious concerns" across a range of issues.
French and German finance ministers have said virtual currencies pose risks to consumers, financial stability and even "the monetary sovereignty" of European states. Facebook has said it will not seek to establish Libra anywhere in the world until U.S. regulators are satisfied.
Source: Reuters 23 October, San Francisco & New York
Reporting: Katie Paul, Anna Irrera & Pete Schroeder