Luxury e-commerce giant Farfetch is one of 27 organizations — among them, eBay, Visa Inc. and Mastercard Inc. — to get behind Facebook’s latest push into cryptocurrency with Libra.
“Libra’s mission is to create a simple global financial infrastructure that empowers billions of people around the world. It’s powered by blockchain technology, and the plan is to launch it in 2020,” Facebook founder Mark Zuckerberg stated on the platform Tuesday.
E-commerce companies pay higher “card not present” rates in payment processing, one of many reasons for companies to get onboard. Farfetch chief strategy officer Stephanie Phair stated, “We have been looking at blockchain technology to help solve a range of fashion industry issues. We were delighted to be approached by the association for this initiative, which we believe will enable frictionless e-commerce for hundreds of millions of people around the world.”
Blockchain is the underlying technology that has many applications supporting cryptocurrencies. At its simplest, blockchain provides a decentralized database of transactions that are each verified by multiple users of the database. Revathi Greenwood, head of research for the Americas at Cushman & Wakefield, told FN, “Retailers are exploring the use of blockchain in improving supply chain efficiencies, thereby reducing time delays, costs and human error.”
“We believe blockchain will benefit the luxury industry by improving IP protection, transparency in the product life cycle…” said José Neves, Farfetch CEO and co-chair. “As a founding member of the Libra Association, we will actively participate in the technical development of the blockchain, whilst at the same time being able to learn from our participation and accelerate our other blockchain projects.”
Libra will be managed by the Libra Association. As part of this group, Farfetch will have an equal say in how the new cryptocurrency is managed.
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