Rumors of Facebook’s Upcoming Cryptocurrency: Big News for the Cryptocurrency Community?
Rumors of that social media giant Facebook has been developing its cryptocurrency called Libra have been making rounds, but the company has so far not confirmed whether they are true or not. However, the truth is now days away because of sources with insider information claim that the company will release a white paper in June.
Could the long-time rumors become true?
Although numerous individuals have come forth with claims that Facebook is working on digital currency, the rumors are further enforced by some of the company’s previous actions. For example, last year it hired David Marcus, who previously worked at PayPal. He became Facebook’s Vice President of messaging products.
The company’s decision to hire former PayPal executive fueled rumors that the company was working on a monetary solution for its social media platforms. Furthermore, David’s role at Facebook also involved Blockchain-related pursuits. The company’s interest in the technology that supports the existence of digital currencies further fueled speculation that the social media firm has its cryptocurrency in the works.
Would Facebook be stepping too much out of its element by having its cryptocurrency?
A cryptocurrency might be part of Facebook’s plan to revamp its social media platforms and its image because the past couple of years have been rough. The company has struggled to uphold its reputation ever since it was accused of breaching consumer privacy and also its involvement in the 2016 presidential elections manipulation by Russia.
Facebook thus needs to do something that will improve its brand image. A cryptocurrency for its social media platforms sounds like a big leap but one that might be a good idea. The world is slowly accepting cryptocurrencies, and an early start would be great for the company.
What would the cryptocurrency be used for?
Facebook already has an advantage when it comes to numbers. Its Facebook platform already has more than 1 billion users from all over the world. Instagram is also quite popular, and so is the WhatsApp Messenger. The main idea is to facilitate transactions using the rumored cryptocurrency through Facebook’s social media platforms.
The upcoming cryptocurrency could allow WhatsApp users to engage in peer-to-peer payments, which means that one person could send funds directly to another using the messaging platform. Meanwhile, Instagram and Facebook would dive deeper into e-commerce. It is also possible that Facebook may also be planning to pay its employees through the upcoming cryptocurrency.
Note that Facebook has not confirmed the cryptocurrency or any of its uses, but sources claim that it will be a stablecoin. This means that it will likely not be affected by heavy volatility like other mainstream cryptocurrencies such as Bitcoin. A stablecoin is more usable because its price is not subject to massive fluctuations and surges as has been the case with most digital currencies that exist today.
Where would the cryptocurrency be available?
There have been reports that Facebook’s upcoming cryptocurrency will be launched in numerous countries by next year. You might be wondering why it would not be launched globally, but that is likely because a pilot test in a few countries will allow the social media giant to get a feel of the market. This is similar to how it launches new features on its platforms where they are released to small demography before the mass release. This allows the company to fine-tune the product to user preference.
It is not clear which countries Facebook would target with its cryptocurrency, but the chances are that countries within its major markets will be among them. If that will be the case, then the U.S. and the U.K. will be among the few countries where the digital currency will be launched. However, Facebook runs its operations globally, meaning that a global launch is also expected.
Will Facebook be able to gain the public’s trust?
It is said that trust is like a mirror. Even if it is fixed, one can still see the cracks. However, trust is earned, and this is something that Facebook has to work very hard to make sure it regains the lost trust. A globally available cryptocurrency available on already available social platforms sounds like a good place to start.
Facebook will have to be very careful and strategic with the rollout of its supposed cryptocurrency if it wants to regain the public’s trust. If done well, it might end up becoming a global phenomenon as it did a few years ago when everyone who was not on Facebook felt like they were missing out.
Facebook’s cryptocurrency might attract global attention
Reports that Facebook has been developing its cryptocurrency are great news for the cryptocurrency community. Facebook has enough financial muscle and influence to pull off a global launch. It might also add more value to its social media platforms, making it even more appealing to new users.
It represents a chance to finally take cryptocurrencies to a global level, and this could also give the already existing cryptocurrencies a boost. Facebook’s involvement in digital currencies will likely encourage the public to gain trust and confidence in cryptocurrencies, thus benefiting other cryptocurrencies.
Facebook should expect challenges
Numerous companies and organizations that have launched cryptocurrencies in the past have experienced some challenges along the way, and Facebook will not be the exception. It is not easy to roll out a cryptocurrency potentially available globally without rubbing shoulders the wrong way with financial institutions and regulators.
Central banks from all over the world previously expressed concerns about cryptocurrencies and the danger that they pose. Blockchain technology is decentralized, thus taking control away from centralized institutions such as central banks, cryptocurrencies, therefore, threaten to disrupt global financial systems. Facebook’s challenge will probably be appeasing financial regulators.
The company’s CEO, Mark Zuckerberg has reportedly been holding talks with financial regulators from different countries including the U.K. and the U.S. This means that Facebook is pulling all the necessary steps to make sure that its rumored upcoming cryptocurrency is successful.