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How Facebook Globalcoin Will Make Private Money Work After Hiring Bank Lobbying Supremo

Facebook Globalcoin

With the Facebook Libra / Globalcoin set to launch as soon as Tuesday 18 June and news that the social media giant has just hired a Standard Chartered bank lobbying supremo, interest is reaching fever pitch.

Some have questioned why Facebook is launching a crypto
product at all, while others says it will probably not be a “real” crypto.

But both of those viewpoints miss the real import of what Mark
Zuckerberg is up to.

From Cincinnati Time Store to Bitcoin to Facebook Libra Coin

Before the invention of bitcoin – and its necessary
precursor the internet – the possibility of sustaining a private money form was
limited, and not just by states that jealously guard their monopoly over the
money supply.

A brief glance at the various utopian schemes proffered in
the US in the early nineteenth century, before industrial capitalism had a sure
footing, provides legion examples of the difficulties.

Chief among them was the Cincinnati Time Store venture EWN covered a few months back, that lasted three years and was a success in the localities in which it operated.

Let’s not delve further into the radical anarcho Ricardian
roots of the ideas of Josiah Warren (the time in question was labour time), but
instead home in on its inability to roll out its local success at national
scale.

Its national scale was a part of the secret of the success
of the US as the economic powerhouse it is today – the lack of regulatory
frictions, notwithstanding state laws, provided an accessible home market. But
things were not so straightforward for money.

Many banks competed with issuing their own paper bills (of
exchange) but none held national sway.

Warren’s scheme could not escape the same parochialism borne
of technological limitation. In Warren’s day there was no way to effect a
one-to-many relationship in the fashion of the 21st century
internet.

There were many competing forms of money in the US at the
time, which was partly because of the vast distances that made interconnectedness
before the telegraph and the railway impossible at any faster rate than the
horse.

Facebook Libra coin’s universality

In addition to well-attested properties that money must have
to fulfil its necessary function as a standard of measure, means of exchange
and store of value, there is one that tends to be overlooked or at any rate
subsumed in the others.

Alongside acceptance (trust), portability and divisibility, is
an underlying assumption that the functionality money delivers will be applicable
to the entire universe of all exchange values.

The Cincinnati Time Stores needed a national network that
was available to all – or a large majority – of consumers and producers for it
to establish a hegemonic presence. That was technically not possible; no matter
how much loved the stores may have been in Cincinnati, their impact was
limited.

There was no point in a merchant or service provider marking
up prices in labour-time expended in the production of a good or fulfilment of
a service if there was no market in which such a standard was used. Similarly,
there was no incentive to accept the stores’ notes.

A Facebook global coin makes 21st century private money easy

Enter Facebook’s Libra coin, although the name that was
previously doing the rounds – Globalcoin – illustrates our universality imperative
much better.

Facebook, as the world’s most pervasive social network, is,
privacy doubts aside, the most perfectly suited issuer of private money in the
21st century.

Unlike the Cincinnati Time Store Facebook has the ability to
launch its money simultaneously everywhere if it so wishes. Even if it chooses
a staggered rollout, this potential of universality would still work its magic,
forcing others to respond to its gravitational force.

That’s why it has been so easy for Facebook to do deals (to be
precise, bring in as members of the “independent” foundation governing the
Libra coin) with supposed payment rivals such as PayPal, Visa and Mastercard.
It’s why it has been able to bring service providers such as Uber on board to
accept its private money.

It’s why, after its discussions with the US Treasury and the
governor of the Bank of England, it is presumably fairly confident that it will
be able to comply with regulations, such as they are.

FATF finalises recommendation on global crypto on 21 June –  is Facebook Globalcoin launch timed wrong?

However, we should add a caveat, or at least further
explanation, on the regulation issue.

The Facebook Libracoin/Globalcoin whitepaper is set for release three days before the Financial Action Task Force (FATF) finalises its recommendations for what it calls virtual asset service providers (VASPs) on 21 June.

Facebook is well aware of the impending global crypto
regulations rollout and knows that each jurisdiction will interpret the rules
differently. But its strategy is unlikely to be to play one country’s
regulators off against another, in a sort of whack-a-mole play.

Alternatively, Facebook may seek to argue for laxer
regulations for the unbanked and those not seeking to interact directly with
the fiat financial system – users may be granted a certain amount of currency
or could earn it through various activities such as watching video adverts.

The FATF recommendations as they relate to crypto have been finalised with one exception and this is it: the all-important paragraph 7b, with the salient part highlighted below:

7 (b) R.16 – Countries
should ensure that originating VASPs obtain and hold required and accurate
originator information and required beneficiary information on virtual asset
transfers, submit the above information to beneficiary VASPs and counterparts
(if any), and make it available on request to appropriate authorities.
It
is not necessary for this information to be attached directly to virtual asset
transfers. Countries should ensure that
beneficiary VASPs obtain and hold required originator information and required
and accurate beneficiary information on virtual asset transfers, and make it
available on request to appropriate authorities.
Other requirements of R.16
(including monitoring of the availability of information, and taking freezing
action and prohibiting transactions with designated persons and entities) apply
on the same basis as set out in R.16

It is likely that Facebook is pre-empting this by building
in the necessary “bank wire level” reporting compliance.

To do that it will have to introduce KYC/AML onboarding for
existing Facebook/WhatsApp/Instagram/Messenger customers to gain access to the
Libra Coin.

But to get traction with such an approach means we come back
to the problem of trust, but given that people provide their details to
merchants of all types on the internet and Facebook’s reported partnerships
with existing players, at least partly with an eye to ameliorating such
concerns, this is not necessarily the insurmountable barrier it might appear at
first sight to the social network’s payment and marketplace ambitions.

Facebook’s Project Libra know what regs are coming, or are pre-empting

Alternatively, Facebook, if it hasn’t factored in the
unknown regarding which direction the FATF will move in on paragraph 7b next
Friday, then it would be wise to wait until that is clear.

That’s unlikely to happen at this late stage which does
suggest Facebook knows what’s coming down the line.

And the news today, reported by the Financial Times, that Facebook has hired Standard Chartered’s head of corporate and public affairs, Ed Bowles, to be its director of public policy, suggests it is preparing in advance for the regulatory tussles to come.

Facebook, some existing regulated firms and cryptocurrency industry main beneficiaries

Actually, Facebook would probably be a beneficiary of new
expensive regulatory hurdles to entry, as would existing regulated VASPs and
non-crypto financial services companies.

But these are really side issues. Facebook’s global reach
means its coin will have the universality and the convenience that comes with it.
That will likely trump trust fears for many consumers, if not for government regulators
concerned about privacy and monopoly practices.

The banks and regulators are behind the curve and Facebook
and those crypto firms that can navigate the new regulations will be the winners.

Bitcoin – the one coin to rule them all

So too will bitcoin (if not XRP) and other decentralised (mined) digital currencies that can operate independently of states, even if on and off ramps become policed more vigorously – market activity will simply be transferred to over-the-counter trading.

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Aging FB Users and Low-Income Teens Unlikely to Embrace Facebook’s GlobalCoin, Report Says

An analytical report says that massive adoption of the
soon-to-be-launched Facebook’s GlobalCoin will not be as easy as everyone may
think

On May 28, an analytics company Diar published its weekly report which says that Facebook’s coin aimed at the market of remittance and online payments may have serious difficulties due to the demographics of Facebook users.

Even though Facebook is one of the largest social media platforms in the world, aging FB users may become a significant barrier in GlobalCoin’s mass adoption.

Amount of retirees on FB has been doubling

Diar’s study demonstrates that among people who regularly use Facebook there are less than half younger than 35. As for retirees on Facebook, their number has been growing more than double since 2012 (people over 65).

As many researches have shown earlier, elderly people (from the Baby Boom generation) are the smallest group to make cryptocurrency investments, let alone understand how Bitcoin and other virtual coins work.

So, the report points out, they are highly
unlikely to change their attitude once GlobalCoin appears, since this age group
is a major barrier in crypto adoption, even from a popular social media
platform.

The study says:

“Facebook will be facing an uphill battle on multiple fronts, primarily starting from an aging user base whose knowledge of cryptocurrency likely to be near nil.”

It adds:

“Educating 25% of the world’s population about current cryptocurrency infrastructure that requires private-key management and the glaring reminder of the possible ultimate loss of funds is also unlikely as it would result in the project’s near instant failure.”

Facebook is losing battle on the teenage field

Apart from getting the majority of its users aging, Facebook is also noticed to be losing its teenage audience.

A recent study by the Pew Research Centre believes that Facebook has lost its attractiveness to teenagers as opposed to its rivals.

85 percent of US teen audience prefer making and watching YouTube content. Even SnapChat has got more teenage users than Mark Zuckerberg’s platform.

The study states that currently the growing dominant group of Facebook users are households with low income, including teens. That seems to be a poor basis for adopting GlobalCoin which Facebook has global plans for.

Contradictory data

On the other hand, a recent study by LendEDU reveals quite an opposite thing. As per the research, adult US population believes Facebook’s GlobalCoin to be an even more attractive investment than Bitcoin, XRP and other similar assets.

Many who took part in the LendEDU poll believe
that ‘Facebook Coin’ will be used not only for remittance to India via WhatsApp
but will generally transform the crypto market.

As previously reported by Ethereum World News, Facebook has set up a startup in Switzerland (a country with a ‘crypto-friendly’ attitude) to work on its upcoming stablecoin.

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Mike Novogratz Gives His Support for Social Media Cryptos

Mike Novogratz Social Media Cryptocurrency

Galaxy Digital Founder and CEO Mike Novogratz recently shared his views on the rise of social media cryptocurrencies, particularly with news coming out about the launch of Facebook’s GlobalCoin in 2020.

Novogratz, who has been a regular cryptocurrency pundit and established Bitcoin bull, voiced support for the creation of social media cryptos, even if he doesn’t believe all of the projects will ultimately succeed to the same degree as BTC. In an interview with CNBC published on May 24, the billionaire investor claimed that at least one of the social media coins will succeed.

Novogratz explained,

“I think Facebook’s payment currency, I think Telegram’s gonna have one…You’re gonna see one of those payment coins work, and I think that has the chance to be a real currency.”

Earlier in May Novogratz stirred debate around the future and utility of Bitcoin when he claimed that the original cryptocurrency was reaching the end of its potential as a store-of-value digital asset. While Novogratz was commenting more on the lack of innovation left to developing Bitcoin, BTC enthusiasts questioned whether he meant the coin was no longer poised to be a dominant player in the sphere of cryptocurrency.

Novogratz updated his stance on Bitcoin in the interview with CNBC, reiterating that the coin constitutes a store of value–similar to a digital version of gold–as opposed to the transfer of wealth inherent in most currencies. However, compared to Bitcoin, Novogratz believes that Facebook’s GlobalCoin will be used primarily for payments, distinguishing it from the original cryptocurrency in terms of usability.

The Galaxy Digital CEO also gave his opinion that the ‘crypto winter’ for coin prices is largely over, and that cryptocurrency is entering the start of a bull market. Novogratz explained his belief that cryptocurrency investors, despite being burned in the severe valuation drop throughout 2018, will not be reluctant in their return to the market, telling CNBC,

“I don’t think it’s the case. And a lot of institutions never got in, so they felt kinda smart and now all of them say, ‘Wait a minute, now there’s more cover.’ […] Retail will come and go, and a lot of the guys who got burned won’t come, but there’s seven and a half billion people on the planet, there’s plenty of retail customers to continue to come in. ”

Novogratz is relying upon the entrance of institutional investors to continue driving the price of Bitcoin and altcoins higher, in addition to retail investors who either missed the initial collapse of the crypto markets or are still bullish on their outlook.

He also took time to declare his interest in network-based currencies such as Ethereum and EOS, which he referred to as ‘3.0’ coins. However, despite the innovation being developed by Ethereum and other similarly developed cryptocurrencies, Novogratz believes the competition in the space has become intensified in the race for Web 3.0 network dominance, and that it will likely be ‘years’ before a preeminent currency emerges.

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Bitcoin, Litecoin Transactions Now Available on WhatsApp

The popular instant messaging platform now allows its users to transfer Bitcoin and Litecoin via a new bot, ahead of Facebook that also eyes WhatsApp audience for the use of its stablecoin

The area of crypto transactions is getting wider as the ‘crypto winter’ remains in the past. Now, more platforms offer to conduct crypto transactions for you – and they are not only exchanges or crypto wallets. Even though, some market players started targeting popular messaging platforms for introducing crypto payments, now another company is joining this club.

On Sunday, Zulu Republic tweeted that they had launched a special bot for WhatsApp users to send and receive such currencies as Bitcoin (BTC) and Litecoin (LTC) using a new Lite.Im bot.

Earning crypto on WhatsApp

To send or receive crypto through the new WhatsApp bot, you just need to install it and check on-screen prompts. The bot also enables users to earn some crypto by referring friends and ensuring they install it as well.

At the moment the bot has two language options – Spanish and English. Apart from BTC and ETH, it allows sending and receiving the native token of Zulu Republic – ZTX.

Crypto payments in other messaging apps

Crypto startups are doing their best to make crypto adoption deeper and with a wider coverage. Some companies are going even further and are introducing crypto transactions via regular SMS. This option is much easier to use for those who are not good with gadgets.

In February, it was reported that a crypto wallet Wuabit was also planning to start performing operations with crypto on WhatsApp, Viber, Telegram and SMS too.

Earlier this year, the Lite.Im bot was also launched for Facebook Messenger, Telegram and again – SMS.

Zulu Republic believes that messaging
platforms are crucial for spreading crypto adoption as wide as possible.

Mobile crypto transactions in such third-world regions as Africa and Asia are letting numerous unbanked people have access to the global financial system, online payments and providing them with bigger opportunities.

Competing with future Facebook’s crypto

It is now common knowledge that the social media heavyweight Facebook is busy developing its own stablecoin. A special blockchain division and a recently founded startup in Switzerland are doing the job.

In the light of this, all bots and wallets that offer crypto transactions on platforms that belong to Facebook (Messenger, WhatsApp, Instagram) may be viewed as rivals to Mark Zuckerberg’s company and get relevant measures applied against them.

Photo by Rachit Tank on Unsplash

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Facebook Launches Swiss-Based Startup to Develop Its Crypto

The social media heavyweight has recently set up a company in Switzerland to focus on its stablecoin and blockchain-based payment system

Citing a Swiss news website, Handelszeitung, Reuters reports that Mark Zuckerberg’s social media has chosen the local jurisdiction for making its plans regarding its USD-pegged coin come true.

Choosing the most crypto-friendly country

Facebook is dead serious about its plans to give users a new digital coin and has chosen the best place for creating it. The company is registered in Geneva and the Crypto Valley located in Zug is also close by. As of last year, Switzerland has adopted a friendly approach towards crypto, ICOs and cryptocurrency startups.

As per the news report, Facebook has launched Libra Networks to produce the payments system on DLT which was announced earlier. The secretive project of the company is already known under the title Libra Project.

Libra Networks runs under the ownership of Facebook Global Holdings II, Ireland-based. Apart from cryptocurrencies, the startup will be dealing with other areas closely related to crypto – DLT, analytics, data processing and identity management.

Facebook has not commented on the situation yet.

Investors are looking forward to ‘Facebook Coin’

Previously, Ethereum World News reported that many of US citizens are willing to invest in ‘Facebook Coin’, rather than Bitcoin, and use it on the social media platform and other platforms owned by Facebook, such as, WhatsApp and Instagram.

LendEDU conducted a survey on a thousand adult US citizens, eager to study their trust to the crypto area and the previously announced ‘FB Coin’ in particular.

The report shows that just 7 percent of
respondents have ever invested in crypto, e.g., Bitcoin, XRP, Ethereum. However,
18 percent are looking forward to buying ‘Facebook Coin’ as soon as it is
launched and open for usage.

Facebook works hard on its crypto product

Recently, Mark Zuckerberg’s giant took two former Coinbase top management employees on its payroll. One of them, Mikheil Moucharrafie, left Coinbase for Facebook in April this year.

The other, Jeff Cartwright, has been with Facebook since March, after working for almost five years for the major crypto exchange.

As reported by Ethereum World News previously, Facebook is in negotiations with a great number of large VC firms in order to raise $1 bln to back its cryptocurrency.

‘Facebook Coin’ has also provoked certain concerns of US authorities, who have recently published an open letter to Mark Zuckerberg, demanding that the company discloses more details about the Libra Project.

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US Adults Keen on Investing in ‘Facebook Coin’ Rather Than in Bitcoin: Survey

A recent survey by LendEDU reveals that adult Americans might not be so interested in the crypto market or assets it offers. However, many are looking forward to the stablecoin launch announced by Facebook

A New-Jersey-based website that allows consumers to compare loans for various goals, including studies or business, has recently conducted an interesting survey. It shows a high interest towards the announced ‘Facebook Coin’.

Adult Americans seem to prefer the yet unreleased stablecoin to investing in such popular crypto assets as Bitcoin, Ethereum, XRP and other cryptocurrencies. Full results have been published in the company’s blog.

Crypto market in 2019, big-names are stepping in

Numerous analysts, financial gurus and investors promise that 2019 is going to be much more fortunate for the crypto industry. Indeed, over the past few weeks, Bitcoin has made some major gains, peaking at the $8,000 level recently and pulling the whole market along up the charts.

In 2019, several major companies, which previously considered Bitcoin and other crypto to be fraud or a bubble, have changed their opinion and are currently working on their own digital coins or have even launched them. A good example here is the JP Morgan banking giant that has now fired away its own JPM Coin.

Another big-name which is about to enter the crypto market is Facebook.

All eyes on ‘Facebook Coin’

Despite the current turmoil in the crypto market, Bitcoin surpassing $8,000 and now falling back in a correction, many people, whose minds are far away from this, seem to be keen on the stablecoin announced by the social media giant.

The LendEDU survey was conducted on 1,000 adult US citizens and has found out that around 7% of them have ever invested in crypto, such as Bitcoin or other virtual assets. However, 18% are interested in investing in ‘Facebook Coin’ because it may have a great potential for practical use.

Facebook user-base totals over 1.5 bln people. Many respondents have said that the ‘FB Coin’ will be not only used for remittance to India via WhatsApp but it is more likely to transform Facebook’s marketplaces in the future.

Currently, people buy and sell goods in numerous groups on Facebook, and the survey participants believe that ‘FB Coin’ will be actively used for that, as well as for other purposes within the social network.

Besides, 57% of respondents chose an answer which implies that they trust Facebook to launch a better crypto coin than other virtual assets in the market.

The LendEDU blog
post says:

Facebook has the ability to tap into a considerable percentage of Americans (and their bank accounts) that have alluded the biggest virtual currencies like Bitcoin, Ethereum, and Ripple. Our data seems to indicate that this is in large part due to Facebook’s potent brand.

Photo by William Iven on Unsplash

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Is Facebook Driving Bitcoin (BTC) Price Rally?

Facebook Coin Bitcoin BTC 2019

Facebook’s interest into cryptocurrency, with the forthcoming Facebook coin likely to be announced in Q3 2019, is finally having its effect on the crypto markets.

The blockbuster rumor that Facebook was in the process of developing a stablecoin for its messaging platform had a small impact on the crypto markets at the time, in large part due to the “crypto winter” for coin prices throughout 2018. Plain and simple: excitement and investor interest in cryptocurrency hit a lull at the end of last year and beginning of 2019, as weary traders and retail investors all but fled the market. The rise in coin prices throughout the first quarter of 2019 have been enough to reignite digital assets, with Facebook making a serious foray into cryptocurrency grabbing the attention of institutional investors.

Some have called Facebook’s stablecoin a primary competitor to Bitcoin, representing the first established company to issue its own currency. However, Facebook’s impact upon the marketplace for cryptocurrency and its adoption has been more in favor of the entire of the industry than seeking to crush it through competition.

For years, cryptocurrency adoption ran into the roadblock of not having major names using or developing digital assets of their own. While Overstock.com was one of the larger online retailers to accept and support Bitcoin, industry pundits remained skeptical on whether a larger enterprise would both using digital currencies. Walmart and Amazon appeared favorites during the bullish run for crypto in 2017, owing to the fact that both companies operate on a large enough scale to benefit from the improved efficiency of blockchain.

However, Facebook has become the frontrunner in establishing massive interest for cryptocurrency. The Facebook coin will likely find a following amongst the 2+ billion users of the social media platform, particularly in developing countries where digital payments provide a welcome alternative to untrustworthy government fiat.

Nonetheless, the real industry growth comes from the exposure of cryptocurrency to such a massive user base. The current divide between a service like Venmo or PayPal and that of Bitcoin is still large enough to buffer otherwise tech-savvy users. With Facebook bringing cryptocurrency to the masses, the advent of token payments and digital alternatives to fiat becomes all the more appealing, particularly when targeted to the global audience that the social media platform commands.

The massive rise in valuation for Bitcoin, which took the coin above $6000 for the first time this year, is in no small part being drive by positive sentiment generated out of Facebook. The company recently announced a landmark shift in its cryptocurrency advertising policy that is clearly paving the way for their own stablecoin. Rather than repelling the industry and generating all-too familiar stereotypes of vagrancy, Facebook is now becoming one of the primary platforms of embracing the industry.

While Facebook Coin may become a substantial competitor to Bitcoin in the future, for now news of the social media platform is having a synergistic effect. Institutional and retail investors alike are changing their predicted outlook for cryptocurrency, and funneling their investment into the increasing market dominance of Bitcoin.

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Facebook Seeks Partners to Back Its Crypto Payments System: Report

Mark Zuckerberg keeps working on his idea regarding Facebook’s crypto payment service despite the privacy issues it has had in the past

A report by The Wall Street Journal (WSJ) reveals that Facebook is striving to find partners to support Zuckerberg’s idea of integrating a crypto payment system. As well as for introducing a fiat-backed coin into the social networking giant.

Facebook has been discussing these ideas with VC companies and e-commerce platforms to find $1 bln for backing the new stablecoin.

Project Libra requires large investments

Nearly a month ago, Nathaniel Popper, the contributor of the New York Times, published a tweet, saying that Zuckerberg and his team are in talks with VC companies in search of funding Facebook’s crypto project.

Update on Facebook’s cryptocurrency: Sources tell me that Facebook is now looking to get VC firms to invest in the Facebook cryptocurrency project we reported on earlier this year. I hear they are targeting big sums — as much as $1b.— Nathaniel Popper (@nathanielpopper) April 8, 2019

The WSJ now writes that this project has been dubbed Project Libra. Among the giants taking part in the discussions are Mastercard and Visa.

How ‘Facebook Coin’ is planned
to be used

Apart from that, Facebook is having negotiations with online merchants, apparently, wishing to attract them both as investors and partners. Apparently, the so-called Facebook Coin would likely not only be used for remittance through WhatsApp but also for buying goods online. One of the ways Facebook could get online merchants keen is cancelling transaction fees for payments made to their apps.

Blockchain Capital has estimated that the current crypto community consists of 100 mln users. Facebook’s user-base exceeds 1 bln people. Should the social media behemoth launch its stablecoin, the crypto community would get a major boost increasing to billions of users.

The WSJ report says that Facebook plans to reward its users with fractions of the new coin for watching ads and providing engaging content, similar to what Brave browser is doing with its BAT coin.

‘Russian Facebook’ VK.com’s token already launched

Earlier, Ethereum World News reported that the Russian rival of Facebook, the social media site VKontakte (VK) has already launched its own token.

However, as per reports, the ‘VK Coin’ is used mostly internally – for incentivizing content makers, for letting users purchase sticker packs, emojis and virtual gifts which can be sent to other users within the platform.

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“Facebook of Russia” Vkontakte To Issue its own Crypto

The business of crypto adoption is attracting the interest of investors in virtually all known industrial sectors, especially in the world of social networks, where many of the Web 2.0 giants are looking for ways to adapt to this new boom.

Despite the hype around the Facebook coin, one of the first companies to show interest in the development of a blockchain was Telegram, the Russian messaging application owned by Pavel Durov (the Zuckerberg of Russia).

Telegram Open Network became the most successful ICO at the time, raising 1.7 Bn USD after a series of private funding rounds. Subsequently, other companies showed interest in the matter, assembling research teams and divisions in charge of developing products based on this technologies.

Following the success of Facebook, the Russian social network Vkontakte would also be considering adapting its platform to blockchain technologies to make it possible for users to send crypto.

VKontakte: If it Works for Them, It Will Work for Us

According to an article published by the Russian online news portal RNS, the social network would be considering launching a native crypto currency to facilitate commercial exchanges and payments between users.

VKontakte Logo

Vkontakte is a social network created by the Durov brothers
as a competition to facebook, however, after various problems with the
government, the brothers sold the website to devote themselves to the
development and promotion of Telegram, an app that would become the main
competition of Whatsapp (owned by Facebook).

RNS claims its team was able to get a filtered presentation, showing how the company expects to use crypto and integrate this tech with its VK Pay payment platform:

“At the disposal of the editors of RNS there is a presentation, from which it follows that one of the options for obtaining cryptocurrency is to charge Coins for their time on the social network and activity. The cryptocurrency earned in this way can be accumulated, transferred to other users, exchanged for tangible goods and converted via VK Pay.”

Until now,
the Vkontakte team has refused to make any kind of comments on the matter, but
it is important to deny that they did not deny the veracity of the news
disseminated by RNS.

Vknotakte
has more than 97 million users, who send approximately 6.5 billion messages a
day. The high activity of this social network could provide an excellent
opportunity for growth of the platform in case the rumors are true.

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Barclays Analyst: Facebook Coin Worth $19 Billion in Revenue by 2021

Interest in Facebook’s forthcoming stablecoin is beginning to take hold in the broader financial market.

According to a report published by CNBC on Mar. 11, Barclays analyst Ross Sandler wrote in a client note that the “Facebook coin” could generate as much as $19 billion in additional revenue by the year 2021. The advent of a new revenue stream in the form of a stablecoin-backed payment protocol would be a windfall for Facebook’s share price, which took a hit in 2018 amid a series of scandals related to user privacy.

Sandler looks to the establishment of a stablecoin, which so far has been proposed for Facebook’s messaging platform Whatsapp, as a substantial source of revenue for the social media giant outside of their reliance on pure advertising, a move that Sandler finds is “sorely needed at this stage of the company’s narrative.”

Assuming cryptocurrency implementation works out for Facebook, Barclays reports the upside to be worth an additional $19 billion in revenue for the company within the next several years, with the base-case, conservative estimate pegged at $3 billion. While Facebook will have its hands full in initiating a smooth launch for the stablecoin and securing adoption for its near 3 billion platform users, its worst-case scenario still appears profitable according to the banking analyst.

Sandler told CNBC,

“Merely establishing this revenue stream starts to change the story for Facebook shares in our view.”

As CNBC points out, Facebook’s decision to rely upon a stablecoin format for their upcoming currency, which will rely on the value of several different fiat currencies, should be more attractive to investors and users given the highly volatile state of cryptocurrency prices. Sandler’s views Facebook’s move into a crypto-backed payment platform, which provides padding beyond what advertising revenue can bring in alone, as a substantial benefit to shareholders, saying,

“Any attempt to build out revenue streams outside of advertising, especially those that don’t abuse user privacy are likely to be well-received by Facebook’s shareholders.”

Interestingly, Sandler points out that the most recent news related to stablecoin development is not the first time that Facebook has tried its hand at building a payment protocol. In 2010, the company created a virtual currency called “Facebook credits,” which CNBC describes as similar to modern-day cryptocurrency. Users would exchange fiat for these credits, which would then allow for in-app purchases. However, Facebook was forced to carry the cost of interchanging between fiat and digital credits, which severely cut into the profitability of the venture and led to the project being scrapped.

Sandler and his research at Barclays believes the earliest iteration of the Facebook coin will be a “single purpose coin for micro-payments and domestic p2p money transfer (in-country), very similar to the original credits from 2010 and Venmo today.”

With former PayPal President David Marcus heading Facebook’s blockchain and stablecoin projects, Sandler believes that the company has more ambitious plans for its payment platform project compared to the failed attempt in 2010. In addition, a recent blog post by Facebook CEO Mark Zuckerberg makes it all the more apparent that the company is looking for innovative ways to increase user security, with cryptocurrency being a logical continuation for payments. If all goes according to plan, Sandler could see the company extending into the realm of consumer lending, remittance and physical payments, an industry that cryptocurrencies across the market have been attempting to capitalize on.

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