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According to reports in the Australian media, senior executives from the banking sector in Australia have made cautionary statements about the fact that the attempt made by Facebook to develop its very own virtual currency is a vividly clear threat to all other industries.
However, there are other payment experts who doubt that this virtual coin will have any effect on the traditional monetary sector. For the banking business chief of NAB Anthony Healy, Facebook will not be the first company to debut a cryptocurrency payment solution. Yet, Facebook has on its side an incredibly vast reach to users via the social media platform, and having access to over a billion users is a big threat to anything.
The name of the Facebook coin is Libra, and for the founder of CoinJar, since no bank has been named to be among the partners of this digital coin, Facebook will be heading straight to some other strategic partners as well as retailers in a bid to bypass lots of regular gatekeepers.
In the late quarters of 2017, the past treasury secretary of NAB mentioned that banks should start getting challenged beyond their capacity to cope with the huge IT platform providers. Meanwhile, some other observers have questioned the advantages that the Facebook payment solution will offer to its users if compared to the other payment platforms that are already in existence.
David Ojerholm, a payment consultancy of The Initiatives Group, thinks that there might likely be a benefit to Libra in the future. It may as well be used for cross border payments.
Nonetheless, it has not been clear on why the heavily banked consumers in Australia want to convert dollars to Libra in a bid to make domestic purchases. People are asking questions on the problems that payers have and how Libra will resolve them. Reports have shown that even if Libra becomes popular as expected, those living in Australia would have no choice but to still make use of a bank account in purchasing Libra tokens. As for the payment infrastructure, it will depend on banking systems that are already in existence and active relationships with merchants.
Judging from what Mr. Ojerholm revealed, between the short and medium term, there will still be lots of points in which banks will be actively involved.
Crypto for Mainstream Audiences
Meanwhile, there is a lot of skepticism concerning how Facebook will tackle the regulatory difficulties of building a new universal digital currency. Its biggest difficulty will be making sure of the successful acceptance of its platform by mainstream audiences.
Counterparts in the technology industry like Samsung, Google, and Apple have shifted their positions into monetary services through computerized wallets. This will enable consumers to make use of their smart mobile devices to execute tap and go purchases.
While they already have partners such as Spotify, eBay, and Uber as a sign of needing commercial traction, they still need a partner that is natural and has a powerful retail following back in Australia.
If the Libra crypto project becomes successful, it still would not have the regular qualities of other corporate currencies. Banks are searching for and looking at digital payment solutions using blockchain technology, and if Facebook creates a compelling proposition banks can just as well think about replacing it.