The cryptocurrency universe has been closely observing Facebook’s decision to launch its own crypto, Libra. After the news first broke out, many have been speculating what the social media giant could do with its crypto. Caitlin Long, Co-founder of the Wyoming Blockchain Coalition, laid out six predictions which went on to ruffle some feathers in the community.
Long’s very certain that Facebook’s crypto will prove to be a positive force in developing countries and that it might pay interest to the holder of its crypto. According to Long, this might lead to “populist calls to repeal subsidies at the heart of the US banking system.” However, she is of the view that unlike other issuers of stablecoins, Facebook won’t be able to make big profits without sharing it with its users. Long said,
“3/ It’s true that #stablecoin issuers generally pocket the float on the assets backing the coins, but I go out on a limb & predict there’s no way @Facebook will be able to pocket these big profits w/o sharing them with users. To be clear I haven’t seen @Facebook disclose this.”
Another prediction by Long suggests that Facebook’s entry could end up being a beneficial detour towards growing adoption, something that happened with the growth of Bitcoin.
“Sixth, @Facebook’s foray into #cryptocurrency will likely end up a beneficial detour on the path to broader #bitcoin adoption. By educating consumers abt the benefits of #crypto & improving the user experience, FB will pull more users into #BTC whether it intends to or not “
People might switch their cryptos to Facebook’s Libra if they figure out crypto and user experience with Facebook, said Long. If Long’s prediction about Facebook sharing its profits with users comes true, then it would be difficult for others to challenge the social media giant following the huge adoption drive it will fuel.