What Experts Think About Facebook’s New Cryptocurrency
Facebook has announced the launch of its own cryptocurrency, the Libra - will it take the world by storm?
In a recent announcement made by Facebook’s head of financial services in northern Europe, Laura McCracken, the executive for the social network giant confirmed that Facebook would be releasing its highly anticipated whitepaper for the platform’s native cryptocurrency. The whitepaper has now been released (18th June 2019).
What Is Libra?
Libra is a cryptocurrency, set to be launched in the first half of 2020. The crypto has been developed by Facebook under the company’s new financial services subsidiary named "Calibra”. The coin is set to revolutionise how Facebook’s 2.4 billion users around the world pay for products and services, with Facebook stating that they “hope to offer additional services for people and businesses, such as paying bills with the push of a button”.
Calibra is set to launch its first digital wallet application in 2020, which will facilitate storage and the transaction of Libra. Initially, the application will be made available through Facebook’s Messenger app, as well as WhatsApp, with Android and iOS apps to be released soon after.
Unlike other cryptocurrencies such as Bitcoin and Ethereum, Facebook’s digital currency is to be backed by the “Libra Reserve” which holds numerous assets with low volatility, such as government securities and bank deposits in various stable currencies, such as the US dollar and the euro. The Libra Reserve will provide stability and help mitigate the risks of extremely high volatility - a seemingly inherent characteristic which is displayed by other cryptocurrencies, including Bitcoin, which has always demonstrated huge swings in its value.
Many crypto enthusiasts have been monitoring Facebook's pioneering efforts ever since it was reported that the company is developing its own native cryptocurrency, back in 2018, which would utilise Facebook-owned messaging application, WhatsApp, to facilitate payments using its own cryptocurrency. According to Bloomberg's sources, the initiative was apparently going to be aimed at India's is near $70 billion remittance market.
Many global organisations are said to be backing Facebook's digital currency, with firms such as PayPal, Uber, Vodafone, Visa, and MasterCard all investing around $10 million each to be part of the Libra Association - an entity comprised of multinational corporations which will collectively oversee the cryptocurrency project.
What Experts Are Saying
Many economic pundits have a positive perception of the social network's nascent cryptocurrency.
Analysts at the multinational financial service provider, RBC, have suggested that Facebook's cryptocurrency will have an extremely positive impact for the social media giant, stating that the project will "prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams".
Since the announcement, Facebook's stock has seen a rise, suggesting investors are positive on the future of the company. RBC also recently upgraded their rating for the company and has set a new expected price target of $250 per share.
CEO of payment app Circle, Jeremy Allaire, has also spoken out on the matter, stating that the launch of the Libra will have a positive impact on the cryptocurrency sector, noting that the project will act as a "massive Inflection point in global adoption of cryptocurrency". Allaire also went on to speculate that Bitcoin would reach a price of $10,000 by the 21st of June 2019 - three days after the release of the "Project Libra" whitepaper.
Although the launch of its very own native digital currency may be positive news for Facebook, many experts in the cryptocurrency world aren't so sure about the development.
A proponent of Bitcoin and cryptocurrency as a whole, Charlie Shrem, appears to be extremely skeptical about the intentions behind Facebook's cryptocurrency project. He recently suggested that the initiative is a deliberate attempt to mislead people away from traditional cryptocurrencies into using a controlled, centralised currency. In a recent tweet, Shrem stated:
"I'm just gonna say it. I think the "FacebookCoin” is an attempt by big tech, banks and credit card companies to lure people away from #Bitcoin into their "better, easier, crypto", which is nothing more than a Fiat coin being masqueraded as a crypto. Millions will be fooled.”
Your thoughts
What are your thoughts on Facebook's cryptocurrency venture?
Do you think it will have a positive impact on the social networks user base? What impact will Libra make on the cryptocurrency world? Do you like the idea of paying for your caramel macchiato using WhatsApp?
Let us know your thoughts in the comments section below.
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Lewis is a U.K. Based writer, with a huge passion for music, travel, health, fitness, finance, and self-development. He truly believes that the pen is mightier than the sword and wants to utilize his passion for writing to help empower people with information that could help them greatly improve their lives and the world around them.