This article is intended to convey more market information and does not constitute any investment advice.
Facebook will release a "Libra" cryptocurrency white paper on June 18 to disclose more details of its cryptocurrency program to the public.
- Researcher's point of view: Will Libra affect the Chinese version of digital currency?
- Exposing Facebook’s announcement of cryptocurrency items this month will open control to third parties
- Facebook's ambition: From the business circle of the social platform to the next world currency?
- Facebook will take a step forward, will Ali Tencent follow up?
- Xiao Lei: The United States prevents Facebook from issuing coins, and challenging US dollar hegemony will trigger a global currency war.
- EU Commission confirms preliminary antitrust investigation of Facebook's Libra
According to previous reports, Facebook's cryptocurrency is positioned in stable currency and will anchor multinational currency. Facebook plans to apply it to its three major social tools and advertising systems, WhatsApp, Facebook Messenger, and Instagram, to reward users for their creation, sharing, and distribution on Facebook. Users can also purchase goods through it.
More importantly, Facebook will plan to apply its cryptocurrency to global cross-border payments and negotiate with Visa and MasterCard. The BBC’s previous exposure to Facebook’s cryptocurrency was “GlobalCoin,” a name that exposed Facebook’s ambition to target the global market.
From the payment transactions for individual users to the transfer settlement for the global market, Facebook cryptocurrencies are laid out. What does Facebook and its cryptocurrency mean for a social giant that connects nearly a quarter of the world's population? In the latest review article, Forbes summarized the possible impact of Facebook cryptocurrency as the following six points:
2. Facebook will pay interest to the cryptocurrency holder, and the beneficiaries in the US banking system will be affected;
3. The Facebook Foundation will gain significant influence in the global capital market;
4. Facebook will face uncertain regulatory issues, and many outdated financial regulatory policies will be exposed;
5. The Facebook regulatory report will trigger various debates;
6. Facebook enters the cryptocurrency market and the ultimate beneficiary is Bitcoin.
Facebook will promote its cryptocurrency in developing countries, which will become a powerful force in developing countries.
The most popular thing for central banks in developing countries is the lack of rules and the difficulty of maintaining the value of the French currency, thus losing the purchasing power of the French currency. An example of a representative is Venezuela. Venezuela is now experiencing more serious hyperinflation than Germany after World War I. Its French currency Bolivar is spiraling down, with an inflation rate of 2,000,000% and is expected to reach 8000000% by the end of the year.
By providing developing countries citizens with a more reliable value reserve than their government's legal currency, Facebook cryptocurrencies will indirectly drive developing countries to implement effective fiscal and monetary discipline – which will improve the lives of many people around the world.
Facebook will pay interest to cryptocurrency holders, and beneficiaries in the US banking system will be affected
We predict that Facebook will pay interest to its cryptocurrency holders because the assets linked to the cryptocurrency will generate interest income (according to some reports, Facebook's "a basket" of currencies includes "low risk securities"). If Facebook does not share these benefits with users, it will be under tremendous public pressure. There will be a lot of critics accusing Facebook and its partners of embezzling user revenue.
So, what is the scale of interest generated by these assets? For example, if Facebook deposits all dollars into the Fed through a bank partner, it can gain 2.35% of the proceeds without risk, that is, for every $10 billion in cryptocurrencies, Facebook will receive $235 million in revenue. If you don't share these benefits with users, it will soon become a hot potato in Facebook.
But there is also a benefit – this issue can cause turmoil and expose the scale of the welfare of core banks in the US banking system. The Fed’s excess reserve ratio for its member banks is 2.35%, and it is expected that Bank of America will receive $36 billion in benefits this year – about half of the US food stamp program. If Facebook and its partners put the money in the bag, critics will no doubt criticize "Facebook's corporate benefits."
However, in fact, almost all other stable currency issuers will use the proceeds of the distribution as their own and never share them with users. However, the amount of Facebook's stable currency is too large and too conspicuous to easily escape the public's attention, so this issue is unlikely to be covered up.
The Facebook Foundation will gain tremendous influence in the global capital market
Facebook plans to hand over control and governance of cryptocurrency projects to an independent foundation recently established in Switzerland. While this is Facebook's presupposition of antitrust charges, on the other hand it does help to reduce the centralization of Facebook's cryptocurrency. Considering that the Facebook Foundation is exercising part of the role of the central bank, it may soon have a huge impact on the global capital markets – the Facebook Foundation will define the weight of the legal currency linked to its cryptocurrency, like the central bank, while managing assets to ensure balance. .
There are many powerful “basket index” developers in the capital market, and they have a huge impact on the market. Lenovo's committee, which defines the Dow Jones Industrial Average (DJIA) or the S&P 500, can see how powerful they are.
Facebook charges at least $10 million as the participation fee for third-party nodes in its cryptocurrency, which at first glance is hard to accept. But as you can see from point 2, everyone involved can get a large interest income. This explains why dozens of banks are willing to participate.
Facebook will face uncertain regulatory issues, and many outdated financial regulatory policies will be exposed
Is Facebook's cryptocurrency safe? If the answer is yes, then in actual use, will the user face the ridiculous phenomenon of buying a coffee bank account? If Facebook's project will bring good tax revenue to the government, can it get the benefits that the startups don't have from the regulators?
The regulatory issues that may be faced by the above Facebook cryptocurrency projects have revealed that the current financial regulatory policies are seriously lagging behind.
Facebook regulatory report will lead to various disputes
We may soon know the number of real-name users in Facebook's 2.3 billion users, because users who use Facebook cryptocurrencies need to prove their identity and pass KYC certification. Facebook is expected to offer more stringent authentication and fraud detection than most cryptocurrency items.
More than that, discussions about Facebook will extend from data privacy and corporate power to funding.
Facebook's regulatory reports will trigger discussions on data privacy, financial privacy, overseas asset reporting, tax compliance, and reporting burdens, and may challenge the extraterritorial reporting requirements imposed by US governments on non-US companies. Governments around the world will use Facebook cryptocurrency as a huge source of consumer data, including all private data and related tax reports.
In a speech in May, Sigal Mandelker, deputy director of the International Terrorism and Financial Intelligence Agency (FinCEN) of the US Treasury, mentioned that FinCEN analyzed the multi-million dollar remittance transaction suspected of terrorism. It was found that the average transaction amount was less than $600. A radical suicide bomber can take hundreds of lives with the price of tape, vests and related materials. "We will never allow any money to flow to terrorists."
In addition, once the Financial Action Task Force recommends that all financial transactions (including cryptocurrencies) embed data about beneficiaries for senders and receivers, those reporting requirements will increase substantially.
Facebook enters the cryptocurrency market, and the ultimate beneficiary is bitcoin
The biggest prediction for Facebook's cryptocurrency is that Bitcoin will ultimately benefit. Although it will take some time, Facebook will greatly accelerate the pace of people accepting cryptocurrencies. By then, more people will turn to Bitcoin for a simple reason – Bitcoin is scarce, and Facebook cryptocurrency is not. Over time, people transfer personal funds to the most honest books, not legal currency or its derivatives, including Facebook cryptocurrencies.
This phenomenon has actually occurred in Venezuela. When the Maduro regime introduced unsuccessful oil coins, the government did its utmost to spread knowledge about cryptocurrencies to the Venezuelan people. But most people ultimately choose bitcoin.
Facebook's entry into cryptocurrency is likely to make Bitcoin more widely available.
This article represents only the author's point of view and does not represent the official position of Mars Finance.
文 | 褚杏娟
Produced | Mars Financial APP (ID: hxcj24h)