Facebook Is Leading, but Bitcoin Is Still the Boss
Bitcoin is the granddaddy of all crypto, and never likely to be rivaled in terms of market cap, widespread popularity or adaptability. While Facebook Coin is an ambitious feat, bitcoin is still king and likely to remain so for some time.
Nevertheless, Zuckerberg seems hellbent on making Facebook the head of the financial arena. Where the idea originally comes from is questionable, considering this is a 360 degree turn for what could once be deemed the largest social media platform in the world. The company has done wonders when it comes to hooking up old friends and relatives, but finance? Really? What makes Facebook think it can suddenly dominate the global monetary infrastructure with virtually no experience?
Interestingly, Facebook’s level of naivete when it comes to financial policy seems to be working in its favor. The company has already garnered millions of dollars in support from varying business partners and has experienced booming stocks as the result of its announcement. Mark Mahaney, an analyst at RBC Capital Markets claims:
We view Facebook’s introduction of the Libra currency as a potential watershed moment for the company and global adoption of crypto. In terms of scale and importance, we believe this new financial infrastructure could be viewed similar with Apple’s introduction of iOS to developers over a decade ago.
While financial players in America are relatively enthused about Facebook entering the crypto space, those in Europe are less than thrilled. French finance minister Bruno Le Maire has commented that Facebook’s Libra Network must not become a sovereign currency. He has also warned citizens that Facebook’s financial services should not replace the use of traditional fiat.
Zuckerberg has been pushing the notion of trust ever since the company’s association with Cambridge Analytica. A portion of the currency’s whitepaper explains how the currency will be supported:
To help instill trust in a new currency and gain widespread adoption during its infancy, it was guaranteed that a country’s notes could be traded in for real assets, such as gold. Instead of backing Libra with gold, though, it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks.
Libra Will Be Treated Like All Other Crypto
U.S. regulators seem to agree that what Facebook is doing is somewhat revolutionary. However, they aren’t willing to take any chances, and state that Facebook will not be privy to any “special privileges.” David Marcus, head of the company’s blockchain program and former exec at PayPal, states:
It is very clear people don’t want their financial data from an account to be comingled with social data or to be used for other purposes.