Everything You Need to Know about Facebook Cryptocurrency!

Last Modified:12 May 2020 14:53:44
Everything You Need to Know about Facebook Cryptocurrency!

If someone is aware of the news about cryptocurrencies, then surely he has heard about the measures taken by Facebook in this field. This social network was at first firmly against cryptocurrencies such that it even banned the advertisement of such currencies. However, after a while, Facebook, much like other large companies, realized that if doesn’t catch up with the quick trend of cryptocurrencies, then it will sustain irreversible damage. Thus this company started taking its measures and activities in a completely secret way in the field of Blockchain and cryptocurrencies. This project, whose hidden aspects are unveiled from time to time, was based on the fact that Facebook wanted to launch its own cryptocurrency and release it to the market.

However, what was this project as a whole?

The Reality about Project Libra

The first hint to the project Libra was Facebook’s interest in cryptocurrencies on January 4, when Mark Zuckerberg announced on his Facebook page that he intended to find out more about this field in 2018. In May 2018, the world found out that Facebook is interested in Blockchain technology.

On May 8, 2018, in a Facebook post, David Marcus, previous president of Facebook messaging, who was also a member of the board of directors at Coinbase (from December 2017), divulged that he has left his responsibility to launch a new group focused on analyzing the application of Blockchain technology at Facebook.

A while after, on December 13, 2018, Cheddar reported that Facebook’s Blockchain group intends to “potentially revolutionize the entire payment industry.”

In a private summit hosted by Facebook, one of the participants told Cheddar that Facebook employees have an idea to develop a decentralized cryptocurrency for 2 billion users of this social network.

Some days later, Bloomberg reported that Facebook has been attempting to develop its own cryptocurrency in order to transfer money in its most popular platform, WhatsApp.

New York Times Confirmed the Release of Facebook Coin

Almost two months later, on February 28, 2019, New York Times confirmed the previous story by Bloomberg and said that given the documents and sources, this project is big enough that the giant of social networks has started negotiating with exchanges in order to sell coins to its customers.

Four people who were involved in the hidden Facebook negotiations leaked some information about it. According to remarks by these people, Facebook had announced exchanges that it expects to release a product in the first half of 2019.

Facebook Is Looking for Investors for Its Project

Then, about a month before, Nathaniel Popper, one of the two journalists who wrote this article in the New York Times, published a new article about Facebook’s encryption project on Twitter.

According to the published article by this journalist, informed sources have told that currently Facebook is going after VC firms to invest in its project and its aims are very high amounts close to one billion dollars.

Since one of the main reasons for Blockchain projects is decentralization, attracting foreign investors can help Facebook to introduce this project as decentralized and less in control of Facebook.

The person who talked to this journalist has also said that Facebook intends to use the money to back this cryptocurrency so to maintain the value of this currency and thus making it less vulnerable against instabilities compared to other cryptocurrencies like Bitcoin.

Finally, a week ago, the Wall Street Journal reported that Facebook is attracting tens of financial companies and online businesses to help launch its cryptocurrency project. The main part of this innovation (project Libra) is that it enables users to use this digital coin to transfer such coins among themselves or use them in Facebook purchases or on the internet as a whole.

It is further stated in this report that during the process of this project Facebook collaborates with companies such as VISA, Master Card, and First Data Payment Processor, and on the other hand regarding the acceptance of this coin and investing on this project, Facebook has talked to electronic commerce companies and related applications, and is trying to attract their view toward this system given the fact that card process fees are zero.

U.S. Senate Is Worried about Project Libra

Facebook’s advances toward cryptocurrencies has been slow and steady. The last measure taken by this company happened on May 14, and it was hiring of the two Coinbase employees with a rich background.

It is worth mentioning that the Banking Commission of the U.S. Senate stated its worry regarding Facebook’s cryptocurrency project and project Libra.

U.S. regulators, in an open letter to this company, urged transparency regarding the aim of the cryptocurrency project and especially the details about the privacy of Facebook users.

It is stated in this letter that:

“Wall Street Journal recently reported that Facebook is attracting tens of financial companies and online businesses to help launch its cryptocurrency project.

Last year, Facebook had asked U.S. banks to share detailed information about their financial customers with this company.

Furthermore, privacy experts have some questions in mind about the methods Facebook uses in widespread data collection, and whether this company uses any information, it gets to reach aims according to the Fair Credit Reporting Act.”

By Developing Its Cryptocurrency, Facebook Will Have an Increase of $19 Billion in Its Income!

According to the published reported by CNBC on March 11, Facebook cryptocurrency can add $19 billion to the income of this company by 2021.

Previously, Ross Sandler, internet analyst at Barclays, had stated that this cryptocurrency can be a new method for Facebook to make money and can increase the price of this company’s stocks, after the decrease due to the scandals of the past. Facebook faced many problems because it used to sell its users’ information to advertisement companies.