The launch of Facebook’s Libra cryptocurrency is expected to be the second biggest event in the history of digital assets, the first being the launch of Bitcoin’s genesis block in 2009. The social media giant has a user base in access of 2 billion, spread across several countries.
Libra, a stablecoin backed by traditional assets like bank deposits and government bonds, is backed by various corporate stalwarts, which leaders of the industries they represent. If a melodious integration happens between these organizations and Facebook’s user base, for the use of Libra in their services, the crypto industry will witness its biggest boom.
Let’s analyze industry wise, how Libra could bloom, and revamp crypto payments.
Global payments and remittance:
International money transfers have witnessed exponential growth in the past couple of years; however, it is marred by several challenges. These include slow processing times, lack of transparency, questionable data privacy, and security, all of which can be solved by blockchain.
Giants of this industry, like VISA, MasterCard, PayPal, PayU, and Stripe, are among the founding members of Libra. All of these companies have an impregnable system is a place for global payments and remittances, which could benefit enormously by the use of Libra. In fact, most of the international payments are processed by Libra’s founding members.
If these corporates integrate Libra in their payment system and start accepting and transferring money using the stablecoin, their user base might increase by hundreds of millions overnight, as even if they cover a small percentage of Facebook users. And if WhatsApp users are taken into consideration, the growth prospect for crypto-blockchain payments almost doubles itself.
One industry which can utilize digital currencies the most is e-commerce. Both cryptocurrencies and e-commerce are for those who well aware of internet usage and digital payments.
Major e-commerce players like Booking Holdings, Uber, eBay, Spotify, etc. are also among the founding members of the Libra Foundation. Each of these represents a separate niche within the e-commerce industry, covering a vast and diverse user base. A vast majority of these companies’ users use Facebook and WhatsApp, which makes them approachable for payments via Libra.
Cryptocurrencies are the perfect answer to the security and privacy issues posed by traditional online payments. However, their use in e-commerce hasn’t been successful yet, mainly because there’s a lack of uniformity in the tokens used by e-com buyers, making it difficult for merchants. Libra is the best solution to this crux, as it is expected to be used by several hundred million people eventually, who could use their tokens to pay online for goods and services.
Telecom is one of the biggest industries globally and is growing rapidly, more so in developing nations. As smartphones become cheaper, the demand for telecom services, both cellular and data, will increase. Increasing data users, more often than not, result in an additional number of Facebook users.
Global telecom giants, Vodafone and Iliad, are also among the founding members of Libra. These companies and Vodafone, in particular, have a presence in several countries, and therefore, it gets paid in many different currencies. Also, these companies promote online bill payments, as it reduces cost and times consumed. However, lack of security infra in second and third world countries make digital payments ever so difficult, which often results in users preferring offline payments, though they have the capacity to pay online. This puts the burden of telecom companies as they have to set up bigger offline centers, with additional staff, which ultimately reduces profitability.
With the use of Libra, all of these issues can be solved to a great extent. Libra will be a single cryptocurrency used by a large number of users to pay their bills, making life easier for the payments department. Also, the crypto payments bring sophisticated security while ensuring utmost privacy, which will definitely encourage users to pay using their tokens. Libra will also be easily accessible to users, as it will be available on platforms like WhatsApp, Messenger, and Facebook, which are used by an overwhelming majority of smartphone users.
We will continue to analyze the other factors in our next article