Is the new “facebook coin” a threat to cryptocurrencies?


Facebook will (apparently) release a whitepaper for its own digital currency next week that it is being created in partnership with Uber, Mastercard, Visa, Stripe, Paypal, Stripe & Booking.com. This coin will be pegged against official gov backed currencies, making it stable and not prone to volatility.

Let’s consider the implications of this.

Facebook and those corporate partners essentially control most of the digital payments and social infrastructure of the majority of the world (excluding China). From day one they will have global distribution and awareness for their product. I think we can assume that this currency will transfer instantly and be essentially feeless. From day one of its launch, every single merchant in the world will be clamouring to sign up to accept payments to their business in this coin. From day one of its launch, the general public will have a real utility for this coin – they’ll be able to potentially order an uber, get food delivered, transfer money to friends or people in their contacts list, buy products within newsfeed or Instagram, etc.

Many consider Libra (it seems the coin will be named after the Portuguese word for pound) to be a threat to cryptos like bitcoin or nano but is it really?

An “advantage” of this coin is supposed to be it’s price stability, wich doesn’t exist with decentralized cryptos. It’s a fair point but it comes to life with some of the same problems as fiat money, inflation, manipulation, etc. The way i see it, libra is a good thing for the crypto space. This will massively bring awareness to digital currencies and their advantages. After that, the free markets will choose the real free and stable currencies.

At the moment, cryptos are very unstable when it comes to price due to it’s lack of adoption. Market caps for crypto currencies are still tiny when compared to fiat money and we can fairly assume prices will tend to stabilize as market caps increase and more and more people use them. So, our opinion is a big NO. Libra is not a threat to bitcoin and friends, but it can actually be a catapult for massive adoption and great returns for crypto’s early adopters. We keep our recomendation of maintaining 5 to 10% of one’s portfolio in crypto.