iStock.com/CHENG FENG CHIANG Facebook Cryptocurrency In it’s effort for world dominance, Facebook, Inc. (NASDAQ:FB) is now going to add a new crypotcurrency, the Libra,... Facebook’s Entry into Cryptocurrency Could Make the Market Soar
Facebook Cryptocurrency Could Have Huge Market Impact
iStock.com/CHENG FENG CHIANG

Facebook Cryptocurrency

In it’s effort for world dominance, Facebook, Inc. (NASDAQ:FB) is now going to add a new crypotcurrency, the Libra, to its company. This means that the social media giant is now officially looking to become a world bank of sorts, and that holds huge implications both for FB stock moving forward and the cryptocurrency market at large.

So what is Libra?

This new crypotcurrency was just announced by Facebook and will be publicly available by 2020. It will be operated by Calibra, a newly formed subsidiary of Facebook, with the goal to, “provide financial services that will let people access and participate in the Libra network.” (Source: “Coming in 2020: Calibra,” Facebook Newsroom, June 18, 2019.)

Significantly, the release noted that this will be the first product that Calibra will release, with more global financial services potentially on the way.

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The Libra, Facebook’s cryptocurrency, will be powered by blockchain and makes similar claims to privacy that many other cyrptocurrencies promise. Many may see the irony in this, what with Facebook being perhaps one of the most notoriously loose when it comes to protecting user data, but that’s a discussion for another time.

The company makes a point to note that the Libra will be integrated across “Messenger,” “WhatsApp” and as a standalone app.

This is huge. After all, Facebook remains one of the most popular social media services in the world with over one-billion users. Simple and easy-to-use integration into Facebook products would help jump-start Libra adoption across the world.

The company is looking to provide easy funding to businesses worldwide, as well as cut out middlemen who snake fees on remittance from migrants to their home countries.

The idea here is turning people’s smartphones—already loaded up with one or several of Facebook’s apps—into digital wallets, allowing easy integration and adoption of the Libra, something that many other cryptocurrencies have struggled to overcome.

For instance, ask the layman about Bitcoin wallets, blockchains, encryptions, and mining and their eyes will likely glaze over.

If Facebook, however, can deliver the Libra in a way that is both accessible and easily understandable to the general public, they may have a real winner on their hands.

Facebook promises that from the start you’ll be able to send, “Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost. And, in time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass.” (Source: Ibid.)

If it can deliver on this promise, then Facebook, Inc. is about to radically redefine the cryptocurrency game.

After all, one of the major knocks on cryptocurrency is the lack of security; these digital bucks are tied to nothing more than faith and goodwill. Facebook, on the other hand, is a multi-billion-dollar global corporation with very lucrative assets that can, to a certain degree, guarantee this currency’s validity.

So if the company is successful in making this user-friendly and smooth as it promises, we could see Facebook stock enter a whole new era of dominance, while the cryptocurrency market at large will be greatly bolstered by the move.

There are some concerns, however, like Facebook’s previous run-ins with privacy violations. The company promises to protect privacy, but does say that in, “limited cases,” Calibra will not share account information or financial data with Facebook or other third party consumers.

Considering that cryptocurrencies’ biggest backers are often people who love the privacy aspect of digital dollars, this could be a sticking point. Other than that, however, this could be a home run for FB stock.

Analyst Take

Facebook is hoping to redefine the cryptocurrency market with Libra. If it is able to successfully integrate it across apps and platforms, then we could very well be witnessing the birth of a new global currency. And that would send FB stock soaring.

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