No one likes the Facebook coin, not the regulators, not the crypto weirdos, and certainly not the banks. And why they hate it, we can only guess. Facebook says that the new currency is an answer for financial inclusion and ‘banking the unbanked’. If that’s true, then it is a goal that everyone has missed. So, why wouldn’t they hate Facebook coin? It’s because a huge centralized company is about to do it?
All the politics behind the reasons for not liking Libra shouldn’t matter to you. All that matters is, will the Libra coin deliver on its promises, what will likely happen and how can we profit from the same.
Libra is about to be the breaking point of cryptocurrencies in the unchartered markets. There are more reasons to believe that than not. Here’s a few reasons why:
The Remittance Market
In the third world countries, sending money is a marquee use case for the new cryptocurrency. The current competition is not just up to task with this role, sorry to say. With Facebook and partner’s facilities and ability, it’s just hard to see anything coming between the ways for Libra.
Crypto Exchange Stablecoin
Libra’s launch is a threat to Tether, the unloved and the biggest stablecoin in the crypto market at the moment. Big crypto exchanges use tether to change their crypto to USD. And there’s reason to be insecure of Libra.
You see, exchanges would replace tether, the first chance they get, nothing personal. Tether is just not ideal. Its banking arrangements remain sketchy to the public, it trades in regulatory uncertainty, not to mention the high velocity of circulation. That’s why people can’t wait to get rid.
Libra on the other hand offers lower volatility, is super liquid and has paper thin spreads. And the banking relationships are 100% solid.
Partner Payment Funnels
The Libra consortium has Uber, Lyft and eBay as partners, among others. It’s obvious that the Libra coin will be used by customers on their platforms. This is what the new coin brings to the table, billions in revenue and a diverse range of users in the ecosystem.
As mentioned earlier, Tether experiences velocity of circulation. It is the same problem that made Uber hesitant in launching the Ubercoin. You see, it’s pointless to have a coin that users would redeem it for a local currency.
Libra is different, the drivers and eBay vendors would still need Libra wherever they go. Plus, there’s lots of ways Facebook could incentivize users to keep holding onto the Libra coin.
Usage In The Third World Countries
Libra coin would be of great use for countries suffering from high rates of inflation and exchange controls for instance Zimbabwe, Venezuela, Iran and Turkey. Citizens often try using bitcoin although it’s illegal. Facebook has a wider reach in these countries. And it would naturally side with its users.
These, among other many reasons are why Libra coin will reach top 5 currencies within months of its launch and exceed the entire crypto market within one and a half years.