For some time now, crypto-currency skeptics have had their way. Although cryptocurrencies haven’t become the standard for payments, that may all change soon as big companies begin to show more interest. More recently, JPMorgan Chase just launched the first US bank-backed crypto-currency even though its CEO, Jamie Dimon, asserted that it was a fraud in the past.
Back in March 2019, I made a post about Facebook’s blockchain team building out its cryptocurrency infrastructure. And now, Facebook is finally ready to reveal crucial details about what it has been working on. A whitepaper about its cryptocurrency codenamed Libra is scheduled for a June 18th release according to sources close to the company.
The Information’s Alex Heath and Jon Victor also reported yesterday that Facebook’s cryptocurrency project would launch later this month.
When asked, Facebook declined to comment on the speculations around its blockchain project since official dates might actually fluctuate. Although the company plans to do a formal launch sometime in 2020.
Facebook’s cryptocurrency will definitely be a huge deal for the commerce and payments industry. It will also usher in a new era for the social media giant. With the combined prowess of WhatsApp and Messenger, Facebook could deploy its cryptocurrency to billions of people across the world and power a new system of payment integration. It could be used to offer low or no-fee payments between friends or remittance of earnings to families from migrant workers abroad who are often gouged by money transfer services.
A Facebook cryptocurrency will not only be revolutionary for individuals. Merchants will also reap benefits if credit card transaction fees are sidestepped completely. On Facebook’s end, the company can have a better understanding of who buys what, or which brands could help amplify its ad-targeting business around the world.
What kind of coin will Facebook release and how will it be used?
Token: The cryptocurrency will be a stablecoin — a token designed to have a stable price to prevent discrepancies and complications due to price fluctuations during a payment or negotiation process. Facebook has spoken with financial institutions regarding contributing capital to form a $1 billion basket of multiple international fiat currencies and low-risk securities that will serve as collateral to stabilize the price of the coin, the Information reports. Facebook is working with various countries to pre-approve the rollout of the stablecoin.
Usage: Facebook’s cryptocurrency will be transferrable with zero fees via Facebook products including Messenger and WhatsApp. Facebook is working with merchants to accept the token as payment and may offer sign-up bonuses. The Information also reports Facebook also wants to roll out physical devices for ATMs so users can exchange traditional assets for the cryptocurrency.