Facebook’s cryptocurrency Libra
Facebook are planning to roll out new cryptocurrencies over the next year that are meant to allow users to send money to contacts on their messaging systems, like a Venmo or PayPal that can move across international borders.
The Key Infomations
Facebook’s cryptocurrency is stablecoin and will be pegged to a basket of different foreign currencies, rather than just the dollar.
Facebook want to integrate the stablecoin with Messenger, Whatsapp and Instagram, whose monthly active users reach 2.7 billion.
Facebook is talking to exchanges about potentially listing a cryptocurrency.
Faceook hope to get a product out in the first half year.
What is the advantage of Facebook?
Facebook own the largest connection network of people in the world. In other word, Facebook’s coin will have good liquidity at the beginning. It’s easy to promote a money transfer service.
What could Facebook do with cryptocurrency?
Facebook’s biggest advantage is the connection network, and the economic service which can make use of the network is remittance. so it maybe be the initial business.
According to reports, facebook will focus on the remittance business in the Indian market. The remittance market capacity is about $69 billion last year.
When enough users get used to facebook’s cryptocurrency, facebook can gradually build its payment system like wechat payment.
Coin incentives for e-commerce
In principle, blockchain could be used to lower transaction fees. And Facebook could offer an immediate 3% discount on everything purchased using the coin. Because FaceCoin would be circumventing traditional partners and processing fees, they could pass the savings on to consumers.
Incentivize users Facebook could encourage users to spend even more time on the platform by incentivize them with coins. And Coins can also be used for advertising rebates Actually, there have been quite a few successful cases in China, such as Qutoutiao.
Almost all the communication giants are actively involved in issuing their own cryptocurrencies. All of them want to benefit from their large user base.