Facebook’s Libra Coin Backed by Visa, Mastercard, PayPal and Uber
$10 Million each Consortium
Facebook is all set to unveil its much-talked-about cryptocurrency Libra next week. The California-based firm has also managed to get the backing of over a dozen financial and internet services firms for the project.
This may as well be the unveiling of the token economy on June 18th. Facebook’s Libra coin could create the digital currency equivalent of the U.S. dollar.
Facebook Has Beaten Crypto Tokens to a Blockchain Product that acts as a Real Digital Currency
While other experiments such as the Telegram Open Network (TON) is making strides toward its October 2019 launch deadline, Facebook’s stablecoin called Libra is looking to have a B2B network that will make all other cryptocurrencies immediately look small.
Facebook’s Libra is Being Backed by Payment Companies
Facebook has secured the backing of over a dozen companies for its upcoming Libra cryptocurrency, set to be announced next week, The Wall Street Journal reports (Paywall). This industry wide on-boarding is the kind of blockchain revolution Bitcoin enthusiasts have been expecting, just nobody expected Facebook to steal the glory.
Facebook as a Bank
Facebook has been so maligned by consumer trust and ethical issues, Facebook has been dropped from an S&P index that tracks socially responsible companies. That is, Facebook is in the dog house. However as questionable as its leadership and conduct have been, having over 2 Billion users means this Libra stablecoin, in terms of digital currencies, could be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams.
Better than Bitcoin?
Facebook’s major partners and network should leave cryptocurrencies completely deflated since as a centralized stablecoin tethered to fiat currencies, Facebook’s Libra will be the ideal means to use online, exchange between friends and family and do what cryptocurrencies could have done had they found mainstream adoption.
The consensus seems to be Facebook’s Libra will be good for blockchain and boost the demand for Bitcoin globally.
The involvement of major financial firms like Visa and Mastercard is interesting because cryptocurrencies are typically seen as providing a cheaper alternative to these payment networks. By partnering with a stablecoin, they are signaling they are open to new kinds of financial transactions, the emergence of tokens, tokens like Libra that will even have their own ATMs.
Facebook is big enough to become the PayPal of stablecoins and eventually a bank for the developing unbanked world.
The financial and e-commerce companies, venture capitalists and telecommunications firms will invest around $10 million each in a consortium that will govern the digital coin. This will make Libra an incredible monetization tool for Facebook, finally using the potential of WhatsApp to its full advantage.
Facebook’s “Crypto opportunity” functionally means its stock could rise to $250. The hype of Libra is going to do the company a lot of good. You don’t have to use Facebook’s flagship app or trust it to know that Libra will be convenient.
Token Economy of Stablecoins
Facebook will release a white paper on June 18 to explain the company’s long-term strategy for the cryptocurrency, or “token.” This will mark the beginning of the token economy of stablecoins.
These new-wave stablecoins will challenge more decentralized cryptocurrencies. Libra could signal how Facebook monetizes:
3) Applications & Gaming
4) Interactions with Ads
5) Ads in centralized encrypted Chat
Libra will be a Multi-Billion Dollar Cash Cow for Facebook
We might be paying Libra not to see Ads on Facebook’s apps. We will definitely be buying things on Instagram with Libra. The potential here is really a multi-billion dollar business.
Libra could eventually rival Square, PayPal, Mastercard, Visa and others because it will be immediately global and appeal to Millennials who see digital currencies as desirable and convenient for cross-border payments, among other things.
Libra will also boost Facebook’s plan to centralize its encrypted Chat bundling Messenger, WhatsApp and other communication channels.
Facebook’s Libra will achieve a full roll out in 2020, and target especially the developing world. This is because in the developed world consumers are expected to churn from Facebook’s suite of apps. Facebook wants to target the other half of the world not on the internet yet.
Facebook’s Libra will prove to be a regulatory pioneer that ushers in an age of stablecoins and a token economy that overlaps with mainstream payment infrastructures and integrates retailers, global brands and both digital and brick-and-mortar interactions. Facebook’s Libra could quickly become the world’s most powerful digital currency.
Fintech firm Stripe, Booking.com, and Argentinian ecommerce site MercadoLibre have also signed up to support the project. With such wide mainstream support from BigTech and global payment companies, Libra will be well positioned to achieve what no cryptocurrency could have achieved, the best chance at mainstream global adoption. That’s always been the holy grail for cryptocurrencies and Facebook’s Libra essentially beats the Lightning Network’s fast tracking of Bitcoin.
However, in a world of Bitcoin vs. Libra’s stablecoin, we all win. If convenience is king for the consumer, no matter how much you dislike Facebook, you might find yourself using Libra.
Libra will be highly collaborative and a B2B hub of such ubiquitousness it won’t even feel like a stablecoin, it will feel like a digital currency network. Libra Networks. It might end up being the best thing Mark Zuckerberg ever does.
Silicon Valley Hitting Back Against Crypto
Facebook Global Holdings registered “Libra Networks” in Switzerland as a financial technology company focusing on blockchain and payments as well as data analytics and investing. This is so much more than just another crypto cloning, this is an interaction of how the future consumer will relate to Ads, relate to their data, relate to investing and how Facebook will eventually acquire companies like Coinbase and other Silicon Valley blockchain scalability projects.
Facebook’s Libra is persuasive enough to attract FinServ partners. So this isn’t just Facebook here, Libra is the California stablecoin. This is Silicon Valley hitting back against crypto. This isn’t just Zuckerberg, this is dozens of other businesses wanting to launch a token economy that’s valid.
Libra will win because it will be a B2B hub that serves consumers. It will win because retailers (merchants) and E-commerce brands will use it. It will win because banks and brokers will want their users to be able to convert fiat currencies into Libra. It will win because there’s nothing quite like it on Earth.
Next week we are going to learn a lot more about Facebook’s Libra project with the whitepaper rumored to be launching on June 18th, 2019.
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