According to media reports Facebook Inc (NASDAQ: FB) is on the brink of announcing its cryptocurrency.
Founded in 2004, Facebook is the world’s largest social media technology business, with names like Instagram, WhatsApp and Oculus also part of its stable of brands. Over 2 billion people use Facebook once per month, with Facebook’s core platform boasting more than 1.5 billion users. Across all of its major brands, including Messenger, 2.7 billion people now use Facebook products.
Facebook Set To Launch Libra Cryptocurrency
According to widespread media reports Facebook is expected to announce it’s cryptocurrency tomorrow, 18 June 2019 US time.
The cryptocurrency will reportedly be called Libra and is from a consortium with other large companies, including Visa, Mastercard, Paypal and Uber. With each company fronting up $10 million each to be involved.
The new currency hopes to avoid the pitfalls of other cryptocurrencies, such as bitcoin. Facebook has reportedly sought blessings from the US Treasury and Bank of England, the BBC reported last month.
It also hopes to further separate itself from cryptocurrency stigma by being pegged to a number of government-issued currencies, in the hopes to stabilise the virtual currency and avoid large fluctuations in value which is a notorious issue for crypto.
This could be a clever move for Facebook, integrating payments into its platforms with one universal payment system, similar to the giant Chinese platform WeChat. Although there have been questions over Facebook’s ability to handle personal information, with many privacy concerns in recent times.
Is Facebook A Buy?
This is brand new territory for currency with a global giant, backed by other global giants, creating their own virtual currency. It will be interesting to see what Facebook can achieve with it. Facebook probably has widespread plans to disrupt many current payment methods.. or Libra could go the way of bitcoin.
If Facebook is about to steal some of the payment pie then shares like Afterpay Touch Group Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Splitit Ltd (ASX: SPT) may have to fight even harder to win market share.
Either way, I’m happily watching from the sidelines with curiosity for the currency technologies of the future that businesses are experimenting with today.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.