By CCN: Ripple (XRP) and most other cryptocurrencies should be looking over their shoulders now that Facebook has announced it is launching GlobalCoin (or Libra), according to Bitcoin expert Max Keiser.
In Keiser’s opinion, GlobalCoin will render altcoins irrelevant, and this includes Ripple. The Bitcoin bull also sees the Facebook coin obliterating payments and remittance companies leveraging cryptocurrencies:
“The $FB global stable coin… FaceCoin obviates need for hundreds of alt-cons including XRP. The alt-coin apocalypse is nigh.”
As has been revealed so far, the purpose of GlobalCoin is making peer-to-peer payments and other microtransactions. That could pressure altcoins like Ripple’s XRP cryptocurrency and Litecoin (LTC), whose chief selling points are speedy, cheap transactions. It is also a niche that crypto-based payment companies such as BitPay target.
Unlike what will happen to altcoins, Keiser expects GlobalCoin to be a boon for Bitcoin. This is because Bitcoin “competes with gold, not fiat.”
Facebook has announced that its digital currency will be pegged to multiple currencies and not just the U.S. dollar.
The social media giant is said to be specifically targeting developing countries where domestic currencies experience wild volatility, with Venezuela and Zimbabwe immediately coming to mind.
Besides its main social media platform, the digital currency is expected to be available via its other properties. This includes WhatsApp and Messenger.
Already, Facebook Messenger has a peer-to-peer payments function that has been a flop, especially in Europe. Mid this month, Facebook is expected to discontinue this service in France and the UK.
While Facebook is using the argument that GlobalCoin will mostly target developing countries with highly volatile national currencies, the social media giant could be eyeing more than that. For one, it might help Facebook increase its revenues in some of the poorer regions of the world where it has a rapidly growing user base but low average revenue per user (ARPU).
As an illustration, the bulk of Facebook’s revenues are drawn from North America despite the majority of users hailing from outside this region. For instance, in Q4 2018, Facebook generated 34.86 percent of its revenues from the U.S. and Canada. In contrast, the Asia Pacific region brought in 2.96 percent of the revenues. Yet, just one country in the Asia Pacific region, India, has more users than the U.S. and Canada combined.
Additionally, the developing world offers more opportunities for growth in payments and remittances as the financial infrastructure is relatively underdeveloped.
Facebook is expected to launch GlobalCoin sometime next year. The social media giant has, however, indicated that the whitepaper for the digital currency would be released on June 18.
Last modified: July 2, 2020 7:26 PM UTC