The cryptocurrency is on the rise in the world, and Facebook decided to play its cards in it. It was in June 2019 that Facebook formally announced the Libra project. Now, what exactly is going on with it?
In May 2019, Facebook planned to make its cryptocurrency, and it was in June 2019 that Facebook finally announced it formally as “GlobalCoin.” I believe what Facebook is aiming for in this approach is to build a visual currency like Bitcoin but with more security, affordability and what makes payment easier whether the user may or may not have a bank account. I think Facebook wants to disrupt the financial barriers. At first, things looked promising for them, but with time it only seems like it is going downhill.
Cryptocurrency is a virtual currency that is available online. For example, Bitcoin, which is like a digital symbol, is stored in online wallets. You can use the virtual currency to pay for the rent, hotel room, and even food. Blockchain is the technology behind the cryptocurrency. It is like a receipt of blocks of information that stay in a network of computers.
Real concern for Facebook
I am sure that many of you are already be familiar with the situation where Facebook came under fire for handling the user data. The banking committee and the US Senate wrote an open letter to Mark Zuckerberg to make an appearance and explain how this currency will work and what would be its policy with the data of users this time around and how can the money laundering issue be addressed.
With the coronavirus outbreak, the Bitcoin prices have skyrocketed to $10,000. It was the result of a panic that hit the investors looking for a safe place for the economic impact due to the decease.
On Wednesday, this cryptocurrency was trading at $10,335, which makes a significant shift in the fortune as the lowest hit by Bitcoin was $3,196 in December 2018.
I believe the Bitcoin is also influenced by the fact that their “halving event” is coming up. The last time it happened (in 2016), the price of the Bitcoin doubled in value to the record high the following year.
The current situation with GlobalCoin
The case with Facebook’s virtual currency was going well until the last month, where the world leaders started to worry about the money laundering issue and global financial stability. To add insult to the injury, seven high-profile partners in the GlobalCoin production have also quit. The partners include PayPal, eBay, Vodafone, Visa, and MasterCard. Which is undoubtedly bad for the project. I think it might not push them over the edge, but still losing big financial firms may have dealt a critical blow to Facebook.
The latest hit to Facebook’s Libra Project was when a group of most powerful nations (G7) warned that virtual currencies like Libra pose threats for the economy and antitrust policies. Therefore, until the Libra project addresses all the concerns, its launch will wait for better timing.
I believe the situation would be very challenging for the owner of Facebook, Mark Zuckerberg, as next week, he would have to appeal against the US House of Representatives over Libra issues over privacy, data security, and money laundering over this cryptocurrency exchange.
In the light of everything that I have said in this article, Facebook has taken the right step towards virtual currency, and its approach is also suitable for average users who find it challenging to convert to virtual currency due to its limitations. Facebook wants to make sure that its users from every day and age can enjoy the perks of virtual money by making it more accessible to the general public by making sure it is secure and inexpensive.
Facebook has received a lot of backfire from this project. It is mainly due to the part where Facebook could not handle the users’ data adequately. And it has caused much concern among people and higher authorities who want to make sure that this time the data is secured and that there is no cause for anxiety. As a result, many solid investors started to take off from the project, which may have caused a lot of concern to Facebook losing financial firms like that.
Bitcoin, on the other hand, is doing well as the coronavirus has made an outbreak in people, and they are now concerned to keep their money safe and have turned to Bitcoin, making it boost in value.
All in all, this is a big project not just for Facebook but for the rest of the world. As well as every user may roam wallet free with their money in the online portfolio and make all the payments virtually, and pretend that GlobalCoin is inexpensive, Facebook is also converting it to other currencies.