During 2014 Facebook commissioned a Facebook finance team of consultants and technology enthusiasts to begin looking into developing its own Bitcoin technology named Libra, having recognised the potential influences of Bitcoin which could change the financial market of the future.
We are all too well aware of the controversy around Bitcoin as well as other crypto-currencies and whilst some businesses and individuals have done very well financially, others have fallen into the fraudulent trap that cypto has also activated. With very little regulation around the technology and the freedom that anyone can contribute to its infrastructure, the financial industry has made it very clear that Bitcoin is not safe and investors should stay clear if they want to hold onto their money.
So how does Facebook finance approach differ from those that are already out there?
First of all Facebook has sought to bridge the gap between block chain and regular currency by bringing the two together to ensure stability. “Libra will be fully backed by a securely stored basket of matching traditional currencies” according to a recent article by Wired.co.uk - Facebook’s Libra coin cryptocurrency, explained. Speaking to banking regulators around the world and backed by widely recognised financial companies such as Visa, Mastercard and PayPal, the new Facebook finance currency could appeal to the 1.7 billion adults who do not have access to a traditional bank or to people who have been impaired by volatile local currencies within their home countries, especially those in developing countries. In these situations the US dollar could be used as a steady / stability currency to be the basis of the new Facebook finance infrastructure.
What are the concerns?
The facility that will allow users to make transactions between family and friends sounds extremely appealing; however, Facebook has regularly come under fire for data breaches on how it uses our information and the seriousness of its own commitment to data security. Whilst Facebook finance is indeed an exciting opportunity and offers lots of scope through its own already developed market of users and contacts (via fits social media platform and partner networks for messenger and WhatsApp), how Facebook facilitates and regulates its new Libra finance offering , will be a greater challenge. Facebook really needs to be at the top of the development stage before the new technology is launched in 2020.
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