Does Facebook get the crypto currencies out of the niche?

Facebook has presented its plans for the new crypto currency “Libra”. Because the network company reaches so many people worldwide, experts believe that the new digital money has a good chance of success. As with all Facebook projects, however, there are data protection concerns.

Many people think it is similar to bitcoin, but it is clearly not. BTC alreaydy has a widespread usage, for example for online casinos, which you can read at https://comohacerpara.com. In the financial world there seems to be agreement: Facebook’s new crypto currency could become a real threat to today’s banks and financial institutions. Joe Weisenthal is a financial expert at the economic service Bloomberg:

There is no other company in the world that is as large and broad-based as Facebook. We do have payment services such as Empeso, WeChat, Venmo or Paypal. But they’re all fragmented. There is simply no unit the size of Facebooks. Also Visa, Mastercard, Paypal, Spotify and Vodafone are included.

The new currency will be based on blockchain technology. However, it should not be subject to exchange rate fluctuations because it is covered by a reserve fund with dollars, euros and yen. The non-profit Libra Association, based in Geneva, Switzerland, will act as a kind of central bank. Financial service providers such as Visa and Mastercard, Paypal and Stripe are among those involved. In addition, companies such as Spotify, Vodafone and the driving service brokers Lyft and Uber are taking part.

Facebook manager David Marcus, who was previously head of Paypal, says it’s finally time for something new. But there is still a long way to go before the new currency is launched next year, says Marcus on CNBC.

Target group first developing countries

Most experts agree on one thing: With Libra, Facebook could get the crypto currencies out of the niche. No company can match so many users of the social network from Silicon Valley. It reaches about 2.6 billion people – including Whatsapp and Instagram. Initially, the target group is likely to be primarily developing countries, where many people often have no bank account or local currencies are subject to large fluctuations. David Marcus:

“Cross-border payments are still difficult, they are expensive, cost around seven percent fees and a bank transfer often takes three to four days. “Don’t link transactions to social data.”

Libra is digital. If you want to use the currency, you have to install an app on your smartphone. Facebook is not mandatory. Other partners such as Paypal or credit card companies make sure of this. Facebook emphasizes:

“This new blockchain is decentralized. It is operated by all its members. We are just one of many partners who will operate the new network and its currency.

Facebook manager Marcus says his company hopes that his 90 million advertisers will pay for their ads in Libra in the future.

Facebook will not be the publisher of the currency. There will be a lot of competition. We want people’s trust. That’s why we’re making big concessions when it comes to privacy. We will not link transactions with social data. There will also be competition within the network between the companies involved.

Facebook’s ambitious project could, however, be confronted with considerable hurdles. These include privacy concerns and regulatory restrictions. On Wall Street, however, there are some advance laurels: The Facebook share price is rising strongly.