Facebook is making rapid progress on its cryptocurrency project codenamed Libra. According to the new revelations, the social media giant is in talks with many companies including big financial investment firms and payment gateways for establishing a complete ecosystem for its upcoming digital coin. The cryptocurrency of Facebook will be a Stablecoin. Its value will be pegged at 1:1 in order to provide stability to its digital currency. This means that the most critical concern about volatility will not be there. The large network of Facebook that is around 2-billion user strong is going to be a primary driver of revenue for the company. Facebook’s users will be able to use Stablecoin for a number of different purposes including shopping, payments, and transfers, etc.
Not all the Facebook, but the whole ecosystem of businesses owned by the company such as Instagram, WhatsApp, Messenger, etc., will be benefited by the invention of this new Stablecoin. It will help Instagram to position itself as a credible player on online shopping as this picture-sharing platform has already unveiled its in-app purchase feature. Experts believe that Facebook is going to create a sort of instant Digital Mall that is ultimately going to compete with large online retailers as it evolves with the passage of time. The advantage of shopping platform by Facebook is the fact that it’s going to make the shopping experience seamless in nature as there will be no additional layer of intermediary that is conventionally present in other online shopping platforms. What’s more, users will be having no need of paying extra money to merchants or banks which conventionally facilitate transactions and charges fee from the concerned stakeholders. The extraordinary feature of Facebook’s Stablecoin will be its application outside the ecosystem of the company wherein customers can use this digital currency to purchase things online using the different payment gateways and choosing the Stablecoin as an option to make payment.
In addition to providing convenience to its users, Facebook is also considering various options about how it is going to integrate its Stablecoin to promote its advertisement architecture. While users will be buying products/services advertised on the Facebook platform using the Stablecoin, advertisers can also use Facebook’s digital currency to buy more advertising space on the company’s platform. Facebook might also use the loyalty program, a very popular format in various retail and online mediums, wherein the company will be rewarding its users for watching the advertisement or engaging with advertisers for specific promotional or advertising campaign. This will help drive the revenue of Facebook from both users and client perspective.
Bitcoin vs Facebook’s Stablecoin
As far as rivalry with Bitcoin is concerned, Facebook’s Stablecoin is an altogether different proposition. While the value of Bitcoin changes according to the market forces, there won’t be any such case with Stablecoin from Facebook as its value will be fixed. This stability is going to be the most positive part of the Facebook currency and expected to change the industry dynamics when it finally launches in the market. Facebook is betting big on this new project as the company has been marred by a number of concerns related to users’ privacy and data security. Now how it handles such issues in its Libra project remains to be seen in the future.