Blockchain Weekly | Unveiled Facebook's Stability Pass Libra

Facebook plans to work with e-commerce companies, including Visa and Mastercard, to launch a stable-based payment platform project code-named "Libra" based on the world's largest social network foundation. This week's feature will analyze the current status of global cashless payments and explore the future of Libra's plans.

Summary

Topic: Transformational payments and e-commerce will be the only way out for Facebook. Facebook hopes that blockchain-based payment services will generate new financial services revenues and attract more brands to advertise on Facebook. Consulting firm Capgemini predicts that the number of global cashless payment transactions will increase from 598 billion to 876 billion during the period from 2018 to 2021. The annual compound growth rate in Asia will reach 29%, and other regions will remain around 10%. Speed ​​up. Facebook will face “multi-faceted attack” from traditional finance and mobile payments. The United States has the largest cashless transaction and the slow development of mobile payment; China has become a giant in the field of mobile payment due to its imperfect credit system; Japan is still a “cash-carrying” society with high cash usage rate; and emerging markets are blockchain technology. The best “test field”, blockchain payments may be the first to spread in emerging economies . Facebook's SZC still faces the risk of foreign exchange, blockchain, and encryption and certification policies in different countries or regions.

Quotes: The total market value of the blockchain hit a new high, and the BTC blood-sucking effect was significant. The total market value of digital passes this week was $185.26 billion, an increase of 8.4% from last week's increase of $14.3 billion. Average daily volume was US$45.05 billion, down 7.7% from last week. The average daily turnover was 25.7%, down 1.9% from last week. The current price of BTC is $5,768, with a weekly increase of 9.3% and a monthly increase of 16.0%. The current price of ETH is $167.9, with a weekly increase of 7.4% and a monthly increase of 4.0%. . The exchange's BTC balance was 761,000, a decrease of 13,441 from last week. The exchange's ETH balance was 8.366 million, a decrease of 267,000. In the process of rising, with the net purchase of chips, the selling pressure is relatively reduced.

Output and heat: The computing power has rebounded remarkably, and the public's concern has declined. The difficulty of mining this week is 6.353T, which is the same as last week. The average daily power is 50.1EH/s, up 4.9EH/s from last week. The difficulty of mining this week is 1897, which is 48 days higher than last week. The average power is 152.0TH/S, which is about 2.4TH/S. The public's search for digital passes has not picked up with prices.

Industry: Bitfinex plans to raise $1 billion, the market is threatening to suck blood; IMF and World Bank and other financial institutions discuss global encryption management standards; Bakkt acquires digital asset custodian company and is applying for escrow license; Facebook is negotiating with companies such as Visa MasterCard to support Its stable certificate program.

Risk Warning: Market Volatility Risk

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As early as December 2018, Bloomberg reported that Facebook is planning to launch a blockchain-based electronic money and payment system, and will be used in the instant messaging software Whatsapp. Recently, this mysterious project has unveiled a veil. According to sources, Facebook plans to cooperate with e-commerce companies including Visa and Mastercard to launch a stable version based on “Project Libra”. The payment platform project will rely on the world's largest social network foundation laid by Facebook to promote the stable pass to more users. The plan has been secretly carried out for one year.

1 Topic : Uncovering Facebook's Stability Pass Libra Facebook CEO Mark Zuckerberg said that payments and e-commerce will be Facebook's only way out. Facebook's current business model is to provide value-added services and advertising. Zuckerberg hopes that blockchain-based payment services will bring new financial services revenues and attract more brands after Facebook's apps become popular. Facebook advertises. Considering that Facebook's user base is spread all over the world, and the development status of users' cashless payment is different, Facebook will face “multi-faceted attack” from traditional finance and mobile payment.

1.1 Global cashless payment status

Cashless payments cover a variety of payment methods such as mobile payments, credit cards, debit cards, checks, credit transfers, and more. Consulting firm Capgemini predicts that the number of global cashless payment transactions will increase from 598 billion to 876 billion during the period from 2018 to 2021. The annual compound growth rate in Asia will reach 29%, and other regions will remain around 10%. Speed ​​up.

US: Cashless transactions are the largest and mobile payments are slow

Due to the popularity of credit payments, the United States is the country with the most cashless transactions in the world. According to the 2018 World Payment Report jointly released by Capgemini and BNP Paribas, the number of cashless transactions in the United States in 2016 was 148.5 billion, accounting for about 30% of the total number of transactions worldwide. But it is also because of the maturity of the credit card system that the United States is far behind the emerging market in China in the field of mobile payment. In 2016, China’s mobile payments totaled an astonishing $9 trillion, 80 times that of the United States.

Cheques have been in North America for more than 350 years. Credit cards originated in some of the largest department stores in the United States. They issued a credit card similar to a metal card to customers, allowing customers to shop on credit; in 1952, the Franklin National Bank of California issued The world's first credit card. Many payment discounts and preferential policies in the United States are tied to credit cards, and their credit card transactions account for 40% of the world. This is one of the reasons why Facebook needs to cooperate with credit card giant Visa in the mobile payment field. Credit cards have the advantages of credit payment, low cost, fast payment, etc., but its application scenario is limited to consumption. In contrast, Facebook's Libra also allows peer-to-peer transfers between users.

In addition, the United States is one of the countries and regions with the highest Internet penetration rate. In 2017, the per capita e-commerce market in the United States was $2,270, but only 20% of mobile payments were spent. As the country with the most popular cashless consumption habits, the relatively lack of peer-to-peer payment methods between mobile payment and users is undoubtedly the most important target market for Facebook's stable certification.

Europe: Significant differences in payment methods

Sweden and Finland in Northern Europe are the regions with the highest number of mobile payments per capita in the world and the growth rate at the same time. There are certain gaps in the degree of cultural and economic development of European countries, and consumers also have obvious regional differences in the choice of payment methods. For example, in the Netherlands, online banking iDEAL is more popular than mobile payment and bank cards; in Poland, consumers prefer PayU, a local fast-transfer service; in Russia, people prefer mobile phones such as GooglePay and Apple Pay. Together with emerging markets such as East Asia and the Middle East, Central Europe is the main force driving the rapid development of cashless payments worldwide. In 2016, the growth rate of cashless payments in Russia reached 36.5%.

China: giant in the field of mobile payments

Statistics show that China's total mobile payment in 2016 is 9 trillion US dollars, and it is expected to reach 47 trillion US dollars in 2020, ranking first in the world. Apple CEO Tim Cook puts the following view on mobile payment dominated in China: China has not experienced the stage of desktop Internet, but directly embraces the mobile Internet. Chinese consumers do not have the old burden of the desktop Internet era. Thanks to the rapid growth of China's economy in recent years and the emphasis on infrastructure construction, the popularity of smartphones and 4G networks has also provided conditions for offline mobile payments.

The lack of a sound credit system is another important reason why mobile payments can open up market space in China. According to a statistics from Goldman Sachs, China has four bank debit cards per capita, but the per capita credit card holdings are only 0.33. On the one hand, Chinese consumers have not developed the habit of paying credit cards and cheques in Europe and the United States. Under the guidance of central bank policies, Chinese commercial banks provide debit card services to ordinary customers at no cost; on the other hand, China lacks laws related to electronic payments, and third-party mobile payment institutions can, without payment of clearing licenses, Bypassing UnionPay's fund clearing platform, its transaction transfer was out of regulation, creating conditions for the brutal growth of third-party payments. Until 2017, the central bank required third-party payment institutions to access the unified network platform.

Compared with the United States, mobile payment is more popular and more comprehensive in China. Due to regulatory factors, Facebook's stable certificate is destined to enter the Chinese market.

Japan: Still a "cash" society

Although the mobile Internet penetration rate in Japan is very high, the proportion of cashless payments is relatively low. Japan's cash usage rate far exceeds that of other developed countries. A considerable number of restaurants and supermarkets only support cash payments, and convenience stores even have machines dedicated to coin change. Japan is also a country with frequent earthquakes and tsunami, and power outages have occurred from time to time. After the earthquake in Hokkaido in September 2018, the electricity in downtown Sapporo was interrupted for a week. Electronic payment equipment was not available, and some citizens without cash were caught in a situation where they could not afford to buy living materials. Japanese people also use the online order to buy things on the e-commerce website, and pay offline to pick up the goods.

According to statistics, in 2017, Japan’s per capita e-commerce expenditure was $1,158, but mobile payments accounted for only 3%. The current situation in which Japanese prefer to use cash is difficult to change.

Emerging Markets: Opportunities and Challenges

Mobile payments are experiencing rapid development and their prospects are still full of uncertainties. The development of mobile payment systems not only faces the complexity of technology and supervision, but also faces the obstacles that traditional financial institutions are eroding. As a result, consumers in emerging markets with imperfect financial infrastructure and difficult access to traditional financial companies are the main force driving the growth of mobile payments in the coming years. Just as China is far behind the developed regions in credit card consumption, it is at the top of the wave of mobile payments. Emerging economies with financial facilities and lack of means of payment are likely to become “test fields” for blockchain payment technology and the first to ushered in explosive growth.

There are rumors that Facebook's blockchain stability certificate will be launched first in India. India’s series of “de-cashing” reforms in recent years have also greatly reduced trust in the Reserve Bank of India. At the same time, India’s mobile payments are still in their infancy. People don’t know what kind of payment tools they need, perhaps numbers. Pass-through can bring about changes in the means of payment for people in emerging economies.

1.2 Increase in cross-border payment needs

Facebook's Stability Pass may also be used for cross-border payments. Facebook includes 2.7 billion users of WhatsApp, Messenger, and Instagram all over the world. If users from different regions are allowed to transfer money, then whether the stability certificate is anchored to the US dollar, or similar to the SDR anchoring a basket of currencies becomes a The topics that need to be discussed, the regulatory issues facing them are also inevitable.

Currently, the four main tools of the global cross-border payment market are third-party payments such as bank wire transfers, remittance companies, international credit card organizations, and Paypal. Bank wire transfer adopts SWIFT channel uniformly, and the handling fee is relatively high. It takes 3 to 5 days to arrive, which is suitable for large-value transfer and remittance; international credit card usually uses US dollar as the settlement currency, which can be used for credit consumption, but has higher credit requirements for cardholders; Third-party payment companies mainly serve small-scale, high-frequency cross-border consumption and other application scenarios.

In recent years, in addition to the traditional import and export trade, new cross-border payment scenarios such as overseas e-commerce purchasing, outbound travel, and study abroad demand have increased rapidly, and their transaction scale has a compound growth rate of 25% from 2012 to 2016. Small, high frequency. A stable pass-based payment system can reduce the frictional cost that third-party payment is difficult to avoid, and becomes another option for cross-border micropayment.

1.3 Advantages and risks of stable certification

Stabilization is a kind of digital certificate that anchors its value through a specific mechanism. It mainly has three stable modes: mortgage real assets, mortgage digital assets and algorithm bank regulation. Facebook's Libra is likely to adopt the first model, linking the value of its stability to a basket of foreign exchange reserves.

Stable pass and the underlying blockchain technology can greatly reduce the additional friction costs incurred in traditional financial payments and increase the efficiency of transactions. Usually the blockchain transfer fee only accounts for 0.1% of the transaction amount, and the confirmation time is usually from a few minutes to half an hour, which is difficult to compare with the existing cross-border payment methods.

The stability certificate was originally a kind of legal currency equivalent created by the digital clearing exchange to avoid regulatory risks and avoid the entry and exit of legal currency. It provides an ideal measure of value for investors in the secondary market and acts as a medium for transactions. People quickly discovered the function of stable certificate as a means of payment. Its price is relatively stable, its fluctuation is much smaller than other digital assets such as BTC, and it can be easily exchanged with other digital assets. Transfer of funds across exchanges, over-the-counter trading of digital assets, etc.

However, the stability of the anchoring currency is fiercely competitive and the homogenization is serious. At present, the USDT issued by Tether accounts for the vast majority of the secondary market transaction volume, and the stable pass has not matured outside the secondary market. Facebook's Libra program will be a bold attempt in mobile social and e-commerce, but this program involves blockchains and foreign exchange regulatory policies in different countries and regions.

2 Quotes: BTC is close to important resistance position

2.1 Overall market: total market value reached a new high, BTC blood-sucking effect is significant

The total market value of digital passes this week was $185.26 billion, an increase of 8.4% from last week's increase of $14.3 billion. BTC once again hit a new high of $5,911 (the global price of the fire coin), and the main circulation certificates such as LTC and ETH also followed the rebound, but still fell 15% to 20% from the high point at the beginning of April, failing to continue to hit a new high. The limited incremental funds are not enough to support the general market, and the funds are concentrated in the BTC, which has a blood-sucking effect on other certificates.

The average daily trading volume of the digital pass market was US$45.05 billion, down 7.7% from last week. The average daily turnover rate was 25.7%, down 1.9% from last week and continued to shrink. Market activity has decreased.

This week, the exchange's BTC balance was 761,000, a decrease of 13,441 from last week. The exchange's ETH balance was 8.366 million, a decrease of 267,000. In the process of rising, with the net purchase of chips, the selling pressure is relatively reduced.

The USDT market value was $2.78 billion, a decrease of $37.8 million from last week. The USDT price was $1.001, which fell to a minimum of $0.99 during the week due to Bitfinex's misappropriation of Tether funds. Bitfinex plans to issue platform-pass financing to cover approximately $850 million in losses.

2.2 Core Pass: BTC continues to be strong, the main circulation certificate follows the rebound

The current price of BTC is $5,768, with a weekly increase of 9.3% and a monthly increase of 16.0%. The average daily trading volume of BTC this week was 14.4 billion US dollars, and the average daily turnover rate was 15.0%. The BTC hit a new high of $5,191 this week and remained volatile above $5,600. BTC is close to the early stage of transaction-intensive areas of 6000 to 6200 US dollars, and the resistance is large. The possibility of price fall in the short term is greater.

The current price of ETH is 167.9 US dollars, with a weekly increase of 7.4% and a monthly increase of 4.0%. The average daily trading volume of ETH this week was 6.10 billion US dollars, and the average daily turnover rate was 35.8%. The ETH month's gains lag behind the BTC, and the trend is weak.

EOS is currently trading at $5.08, a weekly increase of 7.2%, and a monthly decline of 2.7%. The average daily trading volume of EOS this week was 1.78 billion US dollars, and the average daily turnover rate was 39.3%. The EOS callback is relatively large, and the transaction volume is shrinking severely. Due to the BTC blood-sucking effect, it is expected that the adjustment time will be longer.

The current price of XRP is 0.308 US dollars, with a weekly increase of 3.3% and a monthly decline of 9.9%. The average daily volume of XRP this week was 950 million US dollars, and the average daily turnover rate was 7.5%. XRP is still in a downtrend and it is recommended to avoid it.

The monthly volatility of the main pass this week fell. The overall volatility in the past 30 days was small. The monthly volatility of BTC was 11.6%, down 7.3% from last week. The ethical volatility was 16.7%, down 4.8% from last week. EOS monthly volatility was 19.8%, down 5.8% from last week; BCH monthly volatility was 26.5%, down 19.6% from last week. The market is facing important pressure levels, both volatility and volume are slowing.

2.3 Market View: Fishtail Quotes, and cherish

BTC hit a new high, approaching the $6,000 mark. In the past two weeks, although the BTC technology has shrunk and the main indicators have deviated, it has maintained its rising inertia, rising to a maximum of $5,911 and hitting the $6,000 mark. The $6,000 to $6,200 is a densely populated area in the early stage. It is difficult to break through in the short term and needs to repeatedly attack the position. The target price of this round of rising is 6,000 US dollars. The space for further upward movement is more limited. The current round of rising prices has entered the fishtail stage, and there is a certain risk of callback. BTC continues to rise and needs to reduce the position in batches. In the medium and long term, we are still optimistic about the trend of BTC and the development of the blockchain industry. Recovering $6,000 is only a matter of time.

The main circulation certificate other than BTC has a serious blood loss. ETH has only increased by 4.0% in the past 30 days, and EOS has fallen by 2.7% in the past 30 days, both of which are behind the BTC's 16 points. The proportion of BTC to the total market value has increased from 50% at the beginning of April to 55%. The small and medium-sized market value is more serious, and the funds in the market are concentrated to BTC, which pushes its prices up.

USDT falls or deposits opportunities. Affected by Bitfinex's misappropriation of Tether's USDT reserve to make up for losses, the domestic USDT over-the-counter price fell from 6.92 yuan to a minimum of 6.65 yuan. It is reported that Bitfinex will make up for this loss through the issuance of the platform to collect funds. A document issued by Bitfinex shows that its annual profit is about 4,000 to 450 million US dollars. Investors do not need to overestimate the solvency of Tether. The impact of being able to buy a lower-priced USDT has become a rare opportunity to enter.

3 Output and heat: The computing power is obviously rising, and the public is concerned about the decline.

BTC's computing power rebounded significantly, the difficulty of mining was the same as last week, and the difficulty of ETH calculation and mining was slowly rising. The difficulty of mining this week is 6.353T, which is the same as last week. The average daily power is 50.1EH/s, up 4.9EH/s from last week. The difficulty of mining this week is 1897, which is 48 days higher than last week. The average power is 152.0TH/S, which is about 2.4TH/S.

This week's Google Trends statistics for the Bitcoin entry search fever is 8 and has dropped; the Ethereum entry search heat is 7. The public's search for digital passes has not risen significantly with price increases.

4 Industry Highlights: Bitfinex plans to raise $1 billion

4.1 24 financial institutions including IMF and World Bank discuss global encryption management standards

Recently, 24 financial institutions including the International Monetary Fund (IMF) and the World Bank (World Bank) and 11 international organizations have recently gathered in New York to discuss global standards for encryption regulation. The chairman of the highest financial regulator in Korea, who attended the meeting, said: “It is very important to implement international standards all the time.” The Financial Stability Board (FSB) plenary meeting was held at the Federal Reserve Bank of New York on Friday to discuss “the fragility of the global financial system” and upcoming in Japan. Progress report on the G20 meeting. One of the topics discussed was the global encryption management standard. The plenary discussed different initiatives being taken by standards bodies to address the risks of cryptographic assets and any vulnerabilities that may exist in this work.

4.2 Bitfinex plans to issue platform certification and launch IEO to raise $1 billion

Dovey Wan, founding partner of Primitive, a cryptocurrency investment institution, disclosed on Twitter that it is in the process of issuing a certificate and launching an IEO with the crypto-clearing exchange of the New York State prosecutor's lawsuit, and plans to raise $1 billion. Dovey Wan said that there are already two independent sources confirming the news. A screenshot of Bitfinex investor Zhao Dong's circle of friends shows that Zhao Dong said that Bitfinex has a high probability of issuing IEO, and it is said that users have already booked a quota of US$300 million.

4.3 Bakkt acquires digital asset custodian company and is applying for escrow agency license

Adam White, Bakkt's chief operating officer, announced in a blog post Monday that the exchange has acquired Digital Asset Escrow (DACC) to protect its assets held in cold stores. White hinted that the acquisition may help Bakkt add cryptographic assets other than BTC after launch. The article also revealed that Bakkt has been working with New York Mellon Bank (BNYMellon) to create "geographically distributed" private key storage. The chief operating officer also confirmed that Bakkt is seeking a qualified custodian license through the New York Financial Services Department. If approved, the exchange will be able to provide regulated custody of any cryptographic assets it holds, which may help it launch a physical BTC contract in the future.

4.4 Facebook is negotiating with companies such as Visa MasterCard to launch a payment platform project based on its stable certification

On May 2, the Wall Street Journal quoted people familiar with the matter as saying that Facebook is negotiating with companies such as Visa MasterCard to support its stable pass plan. The source said that Facebook has been working for this for one year and will launch a project platform called "Project Libra" based on its stable certification, which should develop a cryptographic certificate and enable its corporate users to Remittances and can be used for online shopping.

Source: Tongxuntong Research Institute