Will Facebook’s Libra finally bring cryptocurrencies into the light?
Tech
Tech
After banning, then last month unbanning, ads for cryptocurrency, Facebook’s imminent entry into the world of digital currency is likely to be a watershed moment for the concept, says one Australian expert.
Today, Facebook is set to release a cryptocurrency project called Libra, built on an eponymous blockchain and backed by a basket of fiat currencies to provide stability and global acceptance.
The idea is to create a global currency with the associated financial infrastructure.
Apollo Capital chief investment officer Henrik Andersson, who is focused on putting money into crypto and digital assets, says it could be a watershed moment because has the potential to bring “hundreds of millions of people” into a crypto ecosystem and introduce them to a digital currency for the first time.
Facebook has 2.38 billion active monthly users.
Bitcoin is up 1 per cent today, but has surged back from its earlier slump this year to sit at $US9290 ($13,588), its apex for the last 12 months.
Facebook has reportedly been working on the currency for about a year and backers include companies such as Coinbase, Mastercard, Spotify and Vodafone.
According to crypto news site The Block, Facebook could make as much as $1bn from the 100 members backing the ‘Libra Consortium’, and the cryptocurrency itself could provide a useful stream of revenue outside ads.
Andersson has been a big proponent of the idea that once traditional institutions start playing with digital assets, that will be a catalyst the sector needs for credibility and growth.
Although the US markets regulator still has not approved a crypto ETF, Fidelity Investments, one of the world’s biggest asset managers with more than $US7 trillion under management, says it’s close to launching a digital assets platform which will allow their clients to begin trading cryptocurrencies.
Other fund managers like Japanese bank Nomura are considering the same.
Fintech, both on and off public markets, has been a popular sector in Australia for months.
Globally, it’s been a major sector for startups and big business alike for years. Neobanks like Volt, small business debt offerers like Prospa, and services providers such as Cashwerkx, a term deposit platform, are trying to give traditional banks a run for customers’ money.
Payments is one vertical for tech companies wanting to become direct competitors to traditional banks, Anderson says.