Social networking giant Facebook is said to be in discussions with financial firms and online merchants to explore a cryptocurrency based payments systems.

The introduction of virtual currency-backed transactions by the world’s biggest social networking site could upend the traditional e-commerce sector and allow for the most mainstream application of cryptos yet.

The Wall Street Journal reported that as part of ‘Project Libra’, a digital coin could enable Facebook users to make purchases on the site as well as across the internet.

The firm has sought $1 billion in funding from financial institutions such as Visa, Mastercard as well as payments processor First Data Corporation to help underpin the value of the coin and protect it from the vagaries of the bitcoin market.

The dramatic growth of digital asset and crypto asset markets over the last couple of years has disrupted and transformed the financial services industry.

Initially intended as a medium of exchange requiring no central counter-party, crypto assets such as Bitcoin have evolved to become alternative investments for investors seeking returns in this asset class, and as such have required new regulatory frameworks globally.

However, adoption by Facebook, which counts nearly a third of the world’s population as users would give digital currencies the most global outreach possible.

Facebook declined to comment, saying it was exploring many different applications. A possible adoption of cryptocurrencies by Facebook would come at a time when the firm faces concerns over privacy with both regulators and users.