Facebook Building Cryptocurrency Based Payments System

Facebook working on developing a cryptocurrency makes a lot of sense. Its a natural leap for the giant social media platform. A digital network must have digital payment options. Cryptocurrency offers a new way to reward users for their data on the site. The idea seems as huge as the internet itself. You can find many financial companies ready to support this project. There was a lot of talk during 2018 that Facebook had something in the works, though Facebook didn’t publicly speak about it, various industry sources have confirmed the plan. The Wall Street Journal report has put most of the rumors to rest.

Facebook’s work on a secret code is known as Project Libra. It assists in building a digital coin for users to trade on the network. With a user base of over 2 billion, the impact would be huge. Facebook plans to extend its footprint to various financial apps and companies. This shows Facebook may give its payments to third-party apps and websites. Social media is using a mutual benefit method when approaching online traders. This allows the traders to join the network as partners. It also asks the traders to invest in Facebook’s cryptosystem. Visa, Mastercard and First have been contacted as per reports. Facebook is also creating a virtual checkout for users to shop across the web. It gives small rewards of digital coins to those who watch ads, shops and take part in giving the content.

Money transfer is the main point of concern for Facebook. The social network is aiming at the exchange market of nations like India. The global user base of Facebook can create a huge acceptance for cryptocurrency. Earlier reports suggest Facebook had plans to get 1 billion dollars from investors. The money helps in supporting the stable-coins. The stable-coins helps to avoid credit card fees. This will benefit users who are not ready to provide credit card details to social media sites. A crypto wallet allows more users to trade with ease on the network. Experts say that it will become publicly available in 2020, read more about it here.

User privacy would be a major concern in this payment method. Adding a currency to the mix would call for high privacy efforts. Users need to feel the network is safe and secure for trading. Chances are Facebook may also have to tackle illegal trading and gambling on a wide scale. Due to its global presence, the laws of various nations need to be well noted. Certain countries haven’t legalized digital currency yet. Venturing into those markets would be quite a task to handle.

However, the introduction of stable-coins by Facebook solves most of these issues. These coins are backed with dollar reserves. This stabilizes the value and reduces the volatility of other digital currencies. Reports by The New York Times states that these coins can help WhatsApp users to transfer cash.

It was also reported that Facebook planned to launch its Cryptocurrency in the initial half of 2019. We will have to wait and see how well Facebook handles the system.

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