Facebook  (FB - Get Report) will launch a new cryptocurreny for its 2.4 billion users next year in the most significant e-commerce development in the social media group's history. 

Known as Libra, an amalgam of references including the French work for Freedom, Roman weights and measures and a fresh translation of "freedom," the digital coin marks what could be the start of a next-generation of payments that could irrevocably change the way we think of global commerce. 

Here are five basic questions that many people are asking following the Libra Association's "white paper" publication earlier Tuesday in Geneva.

WHAT IS IT?

Libra is a digital "stablecoin," similar in many ways to Ripple, that will allow users to buy and sell goods and services on the Facebook platform. The coins will be held by users in digital wallet called Calibra, which will be connected to Facebook's two messaging platforms -- WhatsApp and Messenger -- and will be backed by a basket of global fiat currencies and "offer better, cheaper, and open financial services." 

WHO IS BACKING IT?

The coin itself will be backed by "a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks,' according to the so-called white paper that detailed its specifics. However, Libra will managed by a group of 28 business partners, each making a minimum $10 million investment, working through a non-profit structure based in Geneva.

Payments companies such as PayPal (PYPL - Get Report) , traditional credit card groups such as Mastercard (MC - Get Report) and Visa (V - Get Report) , as well as other online and e-commerce groups such as eBay  (EBAY - Get Report) , Uber Technologies (UBER) Lyft (LYFT) and Spotify will form part of the Libra group, which will remain a separate entity from Facebook itself. 

Former PayPal executive David Marcus will front the project for Facebook.

IS IT A BITCOIN?

Libra will use blockchain technology to verify transactions and maintain an unbreakable ledger, but because it's backed by both fiat currencies and other government securities and isn't limited by a pre-set number of coins that can be created, it's quite different to the bitcoin structure.

Libra has said it will grant permission to certain entities to manage the coin's blockchain, although it will be open-sourced, meaning others can build their own e-commence applications that can work with it. 

RBC analysts Mark Mahaney and Zachary Schwartzman, however, have predicted that an "existential risk" to traditional finance may arise from "a rapid, global consumer adoption of crypto tokens for payments and commerce."

Bitcoin prices have gained more than 5% over the past week, topping $9,200 for the first time in more than a year, as investors have reacted to a series of moves to allows mainstream uses of digital currencies such as Libra and exchange-traded derivatives contracts see increasing volumes.

CAN I TRUST IT?

The fact that it will be valued by a collection of fiat-currency assets should help maintain its value over time, so users will have what Libra calls a "high degree of assurance" the coins will be convertible at a prevailing exchange rate when they're cashed-out of the platform.

Users will be vetted by Libra in order to prevent fraud and use of the coins for criminal activity, but have pledged not to share that data - which includes government ID and other personal information -- with Facebook other than in 'limited circumstances" that involve law enforcement. Facebook has also said it won't target Calibra wallets with user-specific ads.

HOW WILL FACEBOOK BENEFIT?

Facebook has had limited success in the payments area, launching and scrapping a "credits" scheme that allowed gamers to purchase virtual goods and dipping its toe into online e-commerce with PayPal. Last year, for example, payments only accounted for less 2% of its $55.838 billion in global net sales.

Facebook CEO Mark Zuckerberg has stressed the company's near-term focus toward e-commerce offerings, promising investors that the group will build "more tools for people to buy things directly through the platform."

"Over the long-term, if Payments becomes a really important part of what we do, we can - we'll have some options and choices about how we choose to - how to have the revenue flow to us in the future," Zuckerberg told investors following the company's second quarter earnings in April.

The group's 2.4 billion monthly active users, most of which reside in non-U.S. dollar economies, are likely to see Libra as an attractive and stable alternative to their own currencies, given that the collective valuation of the coins will be much broader than a single central bank.