The social network recently shut down its cryptocurrency project, which would have allowed users to make payments directly from their accounts. This would have eliminated the need for the traditional financial system, as Facebook’s cryptocurrency would have been independent. The cryptocurrency was shut down due to internal conflicts about direction and sustained opposition from Washington. But is Facebook considering launching a new cryptocurrency? We’ll have to wait and see. But what’s it all about? Read on to learn more.
Unlike other cryptocurrencies, Facebook’s Libra could be used by billions of users. The Libra cryptocurrency was a surprise for regulators, who were wary that Facebook would steer the cryptosphere. However, Facebook knew it couldn’t do it alone. It recruited the Libra Association to oversee the development of the cryptocurrency’s Libra token and reserve of real-world assets. It also recruited members of the blockchain’s governance rules. This demonstrates how the company is working to create a centralized cryptocurrency.
In late December, the Libra Association announced its intentions to launch a crypto-currency for Facebook. The organization is comprised of venture capital firms, tech companies, and traditional payments institutions. While it is unclear whether Facebook will continue working on its cryptocurrency project, it is aiming to have 100 founding members before launching Libra. The new cryptocurrency will be based in Geneva, Switzerland, and meetings will take place twice a year. The neutrality of Geneva’s government and strong support for financial innovation are the two factors that lead to Geneva’s selection.
Despite being a new and revolutionary idea, the existing cryptocurrencies were not built for scale as a medium of exchange. Moreover, their unanchored prices made it difficult for merchants to accept them as payment. As a result, cryptocurrencies miss out on huge opportunities beyond speculation. Moreover, they fail to provide the user-friendly experience for buying and spending – two crucial aspects of the internet. In Facebook’s case, Facebook’s platform already has over seven million advertisers and 90 million small businesses. It’s the perfect storm for a cryptocurrency.
The Libra Association wants to use the project to drive adoption. They intend to issue Libra coins to validate the digital currency, which will help them to attract users. They also want to reward wallets that keep users active and merchants who make transactions. A Facebook cryptocurrency is just a step in that direction. However, there’s still a long way to go before the first public beta is available. So, in the meantime, let’s wait and see how the new currency develops.
In June, Facebook announced plans to launch a new cryptocurrency. Its name was initially called the Libra cryptocurrency, but that name has since been changed to Diem, which separates it from its Facebook-aligned roots. But the project has not been successful. The project was heavily scrutinized and many regions refused to support the idea of Facebook launching its own cryptocurrency. Many of the big names backing the Libra Association pulled out as a result.