The change is coming, Facebook opens the global cryptographic payment plan

It is reported that Facebook's cryptocurrency, tentatively called "Facebook Coin" – may not be anchored only with the US dollar, but will choose multiple fiat currencies for a "basket" of foreign exchange reserves.

According to The Wall Street Journal, Facebook is planning to work with a number of financial companies and online e-commerce companies to launch a cryptocurrency-based payment system based on its world's largest social network. The Wall Street Journal quoted sources as saying that Facebook’s cryptocurrency payment system project has been secretly carried out for more than a year, with the project name “Project Libra”.

With the addition of Visa and MasterCard, Facebook will undoubtedly help Facebook expand its cryptocurrency to more users. Facebook users can not only buy goods on social networks, but even on the entire Internet. Not only that, but Facebook also intends to embed this payment system into third-party websites and apps, just as many websites and apps can now log in directly using Facebook accounts.

Of course, Facebook’s plan to introduce cryptocurrencies is no longer a “news”, as Bloomberg reported that they will be based on blockchain (which is not yet clear whether it will be a private or public chain) as early as December last year. The legal currency anchors the digital currency and uses this cryptocurrency in the WhatsApp app, allowing users to send and receive funds between each other. It is reported that Facebook's cryptocurrency, tentatively called "Facebook Coin" – may not be anchored only with the US dollar, but will choose multiple fiat currencies for a "basket" of foreign exchange reserves.

It is undeniable that Mark Zuckerberg is well aware that payment and privacy e-commerce will determine the future of Facebook, and their "Project Libra" project will use cryptocurrencies to push e-commerce to a whole new level. When there is a cryptocurrency, Facebook users can directly transfer from the buyer's mobile wallet to the seller's wallet, that is, there is no exchange rate difference, and there is no transaction fee. Social networking is inclusive of instant messaging and e-commerce, and consumer shopping convenience will be greatly improved. In the process, traditional payment can no longer meet market needs and must be realized by cryptocurrency/digital currency.

Zuckerberg believes that if cryptocurrencies are used on Facebook's various apps, it will drive more brands to advertise on their platforms, and once users adapt to Facebook's payment function, they will also bring them A new flow of financial services revenue. Former Facebook employee, current business-level blockchain investment company YGC managing partner Henry Liu said:

“Payment and e-commerce will be Facebook’s only way out, and they need to get rid of the current lagging value-added and advertising business model.”

So why does the “Project Libra” project work with traditional financial companies?

In fact, the popularity of cryptocurrencies is still not high, and it is not popular in daily payment transactions. The traditional financial system is also full of deep-seated conflicts of interest and technical barriers. So, Facebook needs to work with traditional financial companies and allow users to get rewards based on their activities on their platform.

However, Facebook also has its own advantages.

Facebook now has three heavyweight instant messaging apps, Messenger, WhatsApp and Instagram, and how many users do these three apps have? The answer is an amazing 2.7 billion! This means that about one in three people around the world use Facebook products and they all need to buy something.

If Facebook's cryptocurrency is successful, it's highly likely to overturn traditional, lucrative e-commerce channels and potentially become the most mainstream cryptocurrency application. After all, Facebook has been under intense pressure during this time because regulators, users and shareholders are not satisfied with their privacy performance and are now a delicate moment for Facebook's transformation.

This article from the WSJ, the original author: AnnaMaria Andriotis, Liz Hoffman, Peter Rudegeair and Jeff Horwitz

Translator | Moni

Produced | Odaily Planet Daily (ID: o-daily)

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