Zuckerberg’s “killing skills”, will Facebook become the world’s largest bank?

When it comes to the problem of a large technology company, if Facebook is not on the list, then this will definitely be beyond your expectation. From infringing on user data privacy to helping genocide to contributing to the spread of fake news, the social media giant is “inferior” around the world.

Mark Zuckerberg

But for Facebook, these are trivial, and the social media giant is now looking at the niche market for financial services. The $500 billion company has confirmed plans to launch a cryptocurrency called Libra, which has reportedly invited Visa, Mastercard, PayPal and Uber. Ten corporate giants each invested $10 million to join the program.

Unfortunately, some people in the encryption community sneered at Facebook.

But to be honest, Facebook has found an unrealized need in the industry – a fast, easy-to-use, low-cost cross-border payment system that is generally accepted by regulators. Facebook understands that banks fail in this area because of the high cost and slow speed. Of course, Facebook also understands that, among other shortcomings, current cryptocurrencies may not be universally recognized by regulators.

Zuckerberg looks at the whole world

To address regulatory barriers, Facebook founder and CEO Mark Zuckerberg held meetings with central bank governors, government officials and other regulators around the world. Just as Zuckerberg discovered MySpace's weakness before leading the social media industry, he is doing the same thing with cryptocurrency. With the exposure of the Libra partnership, he is now building his arsenal. Note: Prior to Facebook, MySpace was the world's largest social network. It is rumored that in the early days, Zuckerberg wanted to sell Facebook to MySpace for $75 million.

Although Facebook's digital currency does not threaten the attributes of real cryptocurrencies, such as the idea of ​​value storage, anonymity and deflation, it is a threat to a promising path to mainstream cryptocurrency, because encryption is a A fast and inexpensive digital trading medium is expected to be widely adopted.

Why are financial giants taking risks on Facebook?

The partner chosen by Facebook is very telling. By introducing global financial services companies that governments around the world are happy to accept, the company may be suggesting what is preventing cryptocurrencies from gaining mainstream applications. For these financial services companies, putting their reputation on Facebook means they have found a profitable opportunity.

In addition to financial investments, Visa, PayPal and MasterCard have accumulated decades of industry experience worldwide. Last year, Visa was the world's largest credit card issuer. MasterCard is the third.

At the same time, PayPal's market share in online payment processing is 58.49%.

The addition of Uber is the most interesting. This may mean that Facebook already has a digital currency mouse during the pilot phase. Who knows, Uber passengers are probably one of the first services that Facebook users use to pay for Libra.

Facebook is about to become the world's largest bank?

For its part, the synergy created by Facebook’s efforts cannot be underestimated. Coupled with Facebook's more than 2 billion users, Libra's influence and scale have reached an alarming level.

Despite the seriousness of Facebook's digital currency efforts, Libra will of course continue to be attacked by the encryption community. It should be noted that Libra is not a true cryptocurrency (in my opinion, it is not). But Facebook users are less likely to worry about this, for the clear reason – if Libra allows them to trade with anyone, anyone in a frictionless way, even if Libra does not fit the concept of password punk, for them What is the relationship?