Facebook’s Cryptocurrency is ready to Roll – Opportunity or New Form of Control?

Something is a bit odd about the idea of a tech giant like Facebook, already up to its eyeballs in anti-trust schemes and unethical practices, now bringing to market a cryptocurrency of its own. Sketchy crypto plus Facebook equals a need to watch this venture closely. Sure, they have respectable Wall Street names behind them, which somehow doesn’t make me feel better about Libra, the name for the token.

Those on the inside are giving Facebook a thumbs-up for the move into cryptos. According to RBC analysts Mark Mahaney and Zachary Schwartzman, “We believe this may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams.” There is no arguing that Bitcoin and other cryptos have made a resurgence of late. Whether Facebook’s entrée is a factor is unknown. The counter-intuitive bet would have been to buy Bitcoin in January around $3,000. That’s still a big number to the downside if Bitcoin headed to zero.

Perhaps the structuring of Libra itself, and the proposed self-regulation are what the markets like, and perceive this may be the way Facebook and other companies incorporate tokens into their revenue plans. Sources familiar with the Libra launch say that it will be pegged to a basket of government-issued currencies to avoid the wild swings that have dogged other cryptocurrencies. This self-governing aspect must be keeping the feds up at night. The only way Mark Zuckerberg’s credibility could go any lower would be to know that he and his henchman are self-regulating a cryptocurrency. They may argue that the Libra is a fiat currency, as it is backed by currencies of legitimate countries.

On a tangential note, it is reported that the Mafia in Italy (Yes, they are still active) is now using the old Italian lira as a method of transacting sales. The lira is used like the euro among those that play in this black market. Surely this wasn’t the model Zuckerberg drew the Libra from, but it has similar vignettes to that of the Mafia. The Facebook crypto project revolves around a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet.

It looks like a race is on to create the next payment portal that will replace cards and currency. You can rest assured that Facebook will not be the only player in this game. Facebook currently has 2.4 billion active users, a market that service providers cannot ignore. Facebook leaks this news at an interesting time, as the big tech companies come under more federal scrutiny than ever. One would imagine that Visa and MasterCard would try to do the same, perhaps with a consortium of banks and financial institutions. This again would be another deflationary force on the economy, as retailers would pay less in fees, with savings passed on to the consumer. This is another example of how these tech giants do not have a monopoly based upon price control. Other measures will be needed in this modern financial era to be judged as violating the antitrust laws.

About John Thomas

John Patrick Thomas is a four-time cancer survivor who lives with his family in South Florida. John attended Gettysburg College and The American University before embarking on an entrepreneurial career on Wall Street. He turned to the teaching profession after his life-threatening bout with bone cancer. John has recently written a #1 Amazon Cancer Bestselling book entitled, “A Call to Faith, the Journey of a Cancer Survivor.” He has appeared in publications such as The New York Times, The Wall St. Journal, The Washington Post, Memorial Sloan-Kettering Cancer Center publications, and was featured in new DayStar network series, “Impact with Pastor Dave.” He has traveled as a missionary and may be one of the few people that tell you cancer was the best thing to ever happen to him. You’ll have to ask him why.

2 comments

  1. I am interested but I need to know more.
    Barney

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