In the words of the internet communications mogul Zuckerberg: “… it will be as easy to send money to someone as it is to send a photo”. And with this ease, we have witnessed Facebook announcing Libra, its recent cryptocurrency project.
Is the Facebook currency a fad or the future? Following from his latest crypto article, Owen Tustin, VP Relationship Management at emerchantpay, once again reflects on this topic. It certainly has the potential to appeal to a vast amount of people throughout the globe, comments Tustin. “Once the currency proves its stability over most other coins, it will attract the casual user. Bearing in mind Facebook has over 2 billion on its platform, that’s a huge captive audience. It will help build trust in crypto-currencies and blockchain, but it will require a lot more effort to change the public opinion around the legitimacy and safety of digital currency,” according to Tustin.
How is Facebook cryptocurrency different than its predecessors? For this ambitious digital currency, Facebook has secured the backing of approximately 12 corporations, including the likes of Visa, Mastercard, Uber, PayPal, and Booking.com. Another aspect that sets Facebook cryptocurrency apart from its competitors is that it’s expected to function as a “stablecoin”, as The Verge reports. This means that it will be pegged to a basket of government-issued currencies in order to limit the fluctuation associated with cryptocurrencies like Bitcoin.
According to The Guardian, the Facebook currency is expected to cost $1bn and has been in development for a year. It should enable Facebook’s 2.4 billion monthly users to exchange dollars or other local currencies for digital coins. The currency can then be used to purchase goods on the internet or to transfer money using Facebook’s products like
Messenger or WhatsApp, without the need for a bank account. Technology to make transactions with Libra will be available as a standalone app in 2020. “This is going to be a slow burner for Facebook and people will not convert overnight.
With the recent debate around the use of personal data and data security, people will be very likely to wonder how their money will be used. Trusted brands such as Facebook will certainly help increase awareness around cryptocurrency, at the very least,” concludes Tustin.
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