Our take on Facebook’s Libra coin

Last month the long awaited Zuckbucks were finally unveiled as Project Libra adding more steam to Bitcoin’s recent bull run. While the crypto markets reaction was largely positive given the run up in prices, how Libra will effect the crypto ecosystem long-term is still a huge unknown. Here’s our take of how things might pan out.

Crypto’s Gateway Drug

With over 2 billion active users on the platform, Libra will have a reach at launch that still seems ages away for Bitcoin. Even if it’s initially just limited as a way for advertisers to get a discount on Facebook ads like Binance does with $BNB — Libra can reach over 6 million businesses that spend over $50 billion annually on Facebook’s advertising platform.

Undoubtedly crypto will get into the hands of more users, familiarizing them with the world of digital currencies, and even KYC’ing them so they can easily move between Libra and other currencies.

Not only will users become more comfortable transacting with cryto, a giant like Facebook entering the space will also improve standards for UX, making it more accessible to everyone and the leap towards Bitcoin and other cryptocurrencies increasingly easier.

Institutional Demand

We’ve been hearing that the institutions are coming for over 2 years now, making it sound more myth than reality. Given that user numbers and fundamentals only improved during the recent crypto winter, it’s clear that institutions aren’t researching and understanding the space as much as originally hoped. But with an organization with as much size and authority as Facebook entering the space, institutions see it as a major trust signal assuming that the research has been done for them.

While we don’t know many details on how institutions can invest in Libra or the associated security token, like users they will become more comfortable in the space and standards will be set for custody and other institutional infrastructure.

Regulatory Stampede

The bear case for crypto following Libra’s announcement is the upcoming stampede of regulators who deem Libra a legitimate threat to central bank currencies. While there are legitimate privacy concerns given Facebook’s past wrongdoings, the feeling is that regulators are less worried about privacy and more concerned with their own hold on power. Within weeks Project Libra’s CEO, David Marcus has already been called to testify at a House Financial Services Committee hearing.

There will undoubtedly be upcoming regulations affecting Libra, but what will be interesting is how the regulations will affect decentralized currencies like Bitcoin and Ethereum or tokens like BAT and Sendy. Up until now, regulators have largely taken a backseat and let things play out.

While the future is unknown, it’s clear that whatever the outcome, Facebook entering the crypto space will raise the standard for all projects — so welcome Libra!

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