'Trojan Horse For Bitcoin' and 5 Other Predictions For Facebook's Crypto
Wyoming cryptocurrency advocate, Caitlin Long, has been sharing her predictions for Facebook’s forthcoming ‘Libra’ explaining why it may be a ‘trojan horse’ for Bitcoin.
The coin, now known as ‘Libra’ (and no longer GlobalCoin as first believed), is expected to launch on 18th June.
So what does Long predict?
1. It Will Be A Force For Good In Developing Countries
Libra will be aggressively marketed in developing nations with more volatile fiat currencies. Long highlights Venezuela as the most visible example, and says:
By providing citizens of developing nations with access to a store-of-value that is more reliable than their government-backed currencies, Facebook’s cryptocurrency will indirectly exert fiscal and monetary discipline on developing nations—which will improve the lives of many people globally.
2. Facebook Will Pay Interest To Holders Of Libra
Long believes that Facebook will face a backlash from users if it does not share interest income from the assets backing the cryptocurrency. Although most stablecoins ‘pocket the float’, Libra will likely be too big and visible to get away with this.
This could also highlight the level of corporate subsidies from the Fed to U.S. banks, leading to calls to repeal them.
3. Facebook’s Foundation Will Garner Big Power In Capital Markets
Facebook plans to hand over control of Libra to an independent foundation, which it formed in Switzerland. This foundation is likely to become powerful in global capital markets, as it will do what central banks do. It will define the relative weighting of the fiat currencies to which Libra is pegged, and manage the assets.
4. The Project Will Face Regulatory Uncertainty
This is a positive thing, as it will highlight how ill-suited existing regulations are to cryptocurrency. Long also ponders:
Will Facebook catch breaks from regulators that smaller start-ups haven’t—because of the tax data honeypot Facebook’s project will generate for governments?
Either way, it should bring more clarity to the rest of the cryptocurrency space.
5. Questions Will Be Asked
Facebook plans to apply more stringent forms of KYC and AML than most cryptocurrencies. This would lead to the aforementioned ‘tax data honeypot’, as governments would be very keen to trace every dollar spent by their citizens. Not that Facebook will necessarily agree to provide it.
However, not having the greatest track record when it comes to data security, Facebook will be the topic of many discussions now its corporate power will extend to money.
6. Libra Will Turn Out To Be A Trojan Horse For Bitcoin
Facebook’s cryptocurrency will greatly accelerate interest and education in the sector. However, Long thinks that this is just a welcome detour on the way to increased Bitcoin adoption.
Bitcoin is scarce, while Facebook’s cryptocurrency is not. People will migrate over time to the most honest ledger for storing their hard-earned wealth—and that’s not fiat currencies or derivatives thereof, including Facebook’s cryptocurrency.
The same happened in Venezuela; when Maduro tried to educate people to support the Petro, they ended up gravitating towards bitcoin.
Do you agree with these predictions for Facebook’s crypto? Add your thoughts below!
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