The crypto endeavors of the social media giant, Facebook, have been talk of the town ever since it officially came out of the closet with its cryptocurrency project dubbed “Libra”. Recent news reports suggest that a South American online marketplace is in on the social network’s upcoming project.
As the launch date for the platform’s long awaited crypto projected draws nearer, new developments seem to be constantly unfolding regarding it.
According to news reports, Mercado Libre, which is an Argentine online company dedicated to e-commerce and online auctions, has boarded the project Libra. The company is among the most popular e-commerce platforms operating in South America and can be labeled as the Amazon of the region. It has operations spreading across 19 countries including Brazil, Argentina, Mexico, Chile and Colombia.
Facebook’s purported cryptocurrency will be integrated as a mode of payment on the e-commerce platform. It seems likely that the company will operate as a node in Zuckerberg’s expected blockchain network.
Facebook’s move to form an alliance with Mercado Libre for its cryptocurrency project does beg the question why. Despite further details regarding this particular partnership not being shared, it seems that the major reason behind this move lies in the success of Mercado Libre in Latin American regions.
According to reports, it tops the list of e-commerce websites in Latin America with 57,255 visitors. Released as recently as the April of 2018, Mercado Libre has advantage over the likes of Amazon in the region, with a visit volume of 48.9%. All the facts make it pretty clear that Facebook wants to tap into the Latin American market and ensure the presence and hopeful adoption of its forthcoming cryptocurrency in the region through a platform that attracts a large user base.
Facebook’s Project Libra: An Overview
Reports suggest that Facebook’s crypto project kicked off roughly a year ago, coinciding with the platform’s move to hire David Marcus, former president of PayPal, most likely to take charge of the project under development. After that, news of recruits from the e-payments giant became common, safe to say that PayPal became a major source of manpower for Facebook’s initiative.
In addition to hires from PayPal, the social media giant took in some additions from the San Franciscan cryptocurrency exchange, Coinbase as well. Furthermore, it also incorporated the entire team previously employed by a blockchain startup Chainspace. Facebook’s newly formed crypto-centric team had the crypto community talking and many rumors followed the platform.
Coming to Facebook’s digital currency, despite BBC’s earlier reports, the platform’s prospective cryptocurrency will not be referred to as the Global Coin. Instead the project has been dubbed Libra. And in addition to buying out the trademark from a namesake blockchain startup, the platform also registered a company called Libra Networks in Switzerland in May.
The purported cryptocurrency is said to be a stablecoin, in order to maintain a stable price of the token and to avoid discrepancies and complications due to price fluctuations during a payment or negotiation process. Facebook also has been in talks with various financial institutions including Visa and Mastercard, regarding contributing capital to form a $1 billion basket of multiple international fiat currencies and low-risk securities, which will serve as collateral to stabilize the price of the coin.
According to reports, the platform’s cryptocurrency will be transferrable with zero fees via Facebook products including Messenger and WhatsApp. If the user base of the platform, which exceeds 2 billion people globally, accepts Facebook’s cryptocurrency, it could kick start global crypto adoption at a higher rate.
In fact several people believe that Facebook’s upcoming crypto project will be a major milestone including Global investment bank RBC Capital Markets. According to reports RBC Capital analysts Mark Mahaney and Zachary Schwartzman believe that the platform’s long awaited crypto project might just be the most important initiative in the company’s history.
However, despite the projects bright prospects there are some concerns that have come to light. Some people in the blockchain and crypto circle are skeptical about the release date of the coin, as they believe the project’s software still has a long way to go before it can be used.
Other than that, some in the community are of the opinion that the project doesn’t appear to have the hallmarks of a true cryptocurrency. As the fundamental feature of cryptocurrencies is that they are decentralized, which Facebook’s cryptocurrency might not be, at least not 100%. A fact that casts a shadow of doubt on its adoption, especially amongst crypto fanatics.
As per reports, the testnet for Facebook’s Libra project is to be unveiled to the public later this week, which will shape the next move for the social media platform in its crypto journey.