Facebook’s cryptocurrency will have a negative impact on PayPal, says Caitlin Long

Caitlin Long, Co-founder of the Wyoming Blockchain Coalition, recently spoke about Facebook’s entry into the cryptocurrency space with the introduction of Libra, in an interview on WhatBitcoinDid. Long spoke about the primary market the coin would be playing a major role in, and the effect it would have on its competition.

Long stated that Facebook’s cryptocurrency would initially see its base in developing countries, before expanding to developed countries. She stated that Libra would first be an “emerging market phenomenon,” followed by “European phenomenon,” and finally, the “US phenomenon.”

This was followed by Peter McCormack remarking that Facebook would face UX issues with the launch of Libra, further stating that it would be a problem for people understanding the exchange rate and the value they would be holding at a specific time. To this, Long stated that this was the exact reason why Facebook would be marketing the coin in the developing world, in countries where there was a desire to use coins which offer a more stable store of value. She went on to state,

“I wouldn’t be shocked if this is primarily a dollar proxy because in the developing world lots of folks want to store value in dollars more so than in Euros or Swiss francs or yen for example. But, we’ll have to see what that basket is and moreover that basket is not going to remain constant.”

She added that the Foundation would be figuring out the currencies the cryptocurrency would be pegged against and implementing it. She added that this Foundation would be trading it in order to maintain the reserve on a percentage basis that in turn, matches “what they’ve told their customers is in the basket.” She went on to state,

“That foundation is going to be a very powerful force within capital markets, just based on the scale that we’re talking about assuming that’s you know a decent percentage of Facebook’s to point almost 2.4 billion monthly active users ultimately end up using this [..] WhatsApp has 1.6 billion users […] we’re talking about enormous potential scale […]”

This was followed by Long talking about whether Libra was going to have a negative effect on PayPal, Western Union and other transfer services. She asserted that Facebook’s digital currency would indeed effect the likes of PayPal and Western Union. However, it would have a positive impact on people living in the developing world as it would “indirectly create pressure on central banks not to devalue their currencies.” She added,

“This is where I think it can be a powerful force for good. Just simply because it’s going to retain its value better than most currencies the obvious examples are Venezuela, Zimbabwe, you know even Argentina which is it which has done a better job in recent years it’s still devaluing faster than I suspect the Libra’s value will”

Source: Read Full Article