Bitcoin will have a new competitor in the cryptocurrency market in 2020. Thanks to the backing of more than a dozen companies Facebook cryptocurrency will be unveiled later this year with a tentative launch next year. The brand name is going to be Libra.
Bitcoin Competitor Backed By PayPal
Facebook cryptocurrency will be backed by PayPal along with a litany of other companies. Bitcoin will find Facebook to be a well backed competitor. The list of investors also includes Visa and Mastercard, as well as Uber, Stripe, and Booking.com. Each of these companies is set to fund $10 million into the development of Libra. The cryptocurrency will be governed by an independent consortium known as the Libra Association.
Facebook Cryptocurrency Could Be Goldmine
The fact that Visa and Mastercard will be involved in the creation of a Bitcoin competitor seems at first glance to be out of the ordinary. Normally cryptocurrencies would be a competitor to credit card companies because the fees for making online payments with them tend to be cheaper. However, Libra could be a goldmine, and it appears that Visa and Mastercard intend to leverage the 2.4 billion monthly users of the social media network to boost their profits. The new Facebook cryptocurrency could take off in a way that even Bitcoin and Etherium could never match.
External Oversight
The creation of the Libra Association is a move made by Facebook to help reduce the fear of how much power the social media giant wields. By creating an independent body to oversee Facebook’s cryptocurrrency, the company hopes to convince users in developing countries to use this new form of payment. Libra will be available for users to send money via Messenger and WhatsApp. In the future there are plans to build terminals that will work similarly to ATMs, where users can withdraw money. The partnership with Visa and Mastercard will most likely open up the ability to use Libra as a form of payment for online purchases. Bitcoin has many of these same features, but the volatility surrounding the cryptocurrency still has many investors shying away from it.
Launch Obstacles
Facebook will have to overcome several obstacles before they can actually launch Libra. Unlike Bitcoin, Facebook’s cryptocurrency will be tied to a number of government issued currencies. This will help reduce the volatility experienced by its competitors in the market. However, there will need to be a plan in place to prevent fraud and money laundering, which has been a serious concern with cryptocurrencies in the past. In order to make the currency popular in countries like India, these concerns will have to be properly addressed. The social media giant has already been meeting with organizations like the Bank of England and Western Union to discuss the issues and begin resolving them pre-launch.
Facebook In The News
Facebook’s cryptocurrency is not the only newsworthy item in recent months. The company has been cracking down on accounts that are linked to spreading fake news. The biggest move occurred in April, when more than 100 pages and accounts were deleted or blocked. Most of these were in relation to the Indian elections. However, Twitter made the biggest splash in social media recently, when a popular Bollywood actor’s account was hacked. While managing social media accounts is what the company is famous for, launching a Bitcoin competitor may well be its biggest moneymaker yet.
