Could Facebook Coin replace the US dollar?

25 Mar, 2019 | Updated: 25 Mar, 2019
by Will Heasman
Opinion
Could Facebook Coin replace the US dollar?

First JPM Coin, now Facebook Coin, more and more of these corporate “cryptocurrencies” are emerging, with much speculation that these iterations look to supersede Bitcoin (BTC), offering a blockchain based payment solution riding on the back of their monolithic marketing to override the benefits of BTC. But what if that wasn’t the intention of Facebook? What if the firm actually wanted to replace the US dollar instead?

This is the theory according to Ted Livingston the founder and CEO of the messaging service, Kik, add its native cryptocurrency Kin.

Livingstone proposes that Facebook's venture into crypto is a variant of WeChat, the Chinese messaging ecosystem, upon which payments can be made.  

The theory goes that, similarly to WeChat Livingston is trying o digitize the US dollar on its array of messaging platforms via this new stablecoin:

WeChat allowed people to take their money out at any time, but they also added more and more reasons for people to keep their money inside: paying hydro bills, buying food, booking vacations and more. Soon, no one was taking their money out.” Reads the post.

For Facebook this foray into crypto is seemingly altruistic in nature, providing a service for those who find it difficult to send money to family and friends in remote locations, where the transfer of fiat is expensive.

Living stone further explains the use case for remittance, stating:

"Every year, people working in foreign countries send hundreds of billions of dollars from home to family and friends. Today, this process is slow, expensive, and complicated, with an average fee of $14 to send just $200. If Facebook could offer people a way to send money home for free, it would be a game changer for tens of millions of people."

This Is, of course, something that is already being worked on by projects undertaken by Ripple and Stellar to name a few; but Facebook has clearly seen the benefits in this $600 billion remittance industry.

“Instead of working with regulators like WeChat did in China, Facebook can roll out a global financial system without needing to go through the time-intensive process of working with banking regulators country by country.”

While the angle of altruism is a favorable one for Facebook, this internal monetary ecosystem stands to gain them many new users and, in turn, revenue.

Livingstone specifies the need for Facebook to keep user’s money inside the platform, offering better alternatives to competitor vendors, leaving little reason to ever take money out:

“New ways of spending money through the app will become simpler and more powerful than the previous alternatives. Soon, there will be no reason for anyone to take their money out.”

Livingston concludes his theory by comparing the transition from gold, acting as a world currency to the dollar, alluding to the idea of Facebook doing much the same with its new stablecoin:

“Not that long ago the world’s reserve currency was gold, where the value of a dollar was pegged to the value of gold. But then one day the US decided to unpeg the dollar from gold, paving the way for the dollar to replace gold as the world’s reserve currency. So here is my question: what will stop Facebook from doing the same?”

This theory was propagated by Anthony Pompliano who tweeted out Livingstone’s post:

This prompted mass dusiccusion from speciulators who took the theory and ran with it, asserting serval different outcomes:

 

Read more: Starbucks, Samsung and 4 other major companies already working with cryptoFacebook Coin vs. JPM Coin: which does the community prefer?

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