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Will Facebook’s “Libra” cryptocurrency outcompete Bitcoin?

Will Facebook’s “Libra” cryptocurrency outcompete Bitcoin?

Peter Schiff, the CEO of brokerage firm Euro Pacific Capital, believes Facebook’s Libra cryptocurrency will outcompete Bitcoin on stability and fees. BTC advocate Anthony Pompliano disagreed, suggesting the two would help each other grow.

The controversy is over Facbook’s coming “Libra” cryptocurrency. Purportedly named as a dig at the Winklevoss twins’ Gemini exchange, the digital asset will be a stablecoin supported by a basket of international currencies.

The cryptocurrency will reportedly be transferable between Facebook products with zero fees, giving the social media platform a unique position in the financial services sector. Whether or not the cryptocurrency will compete with Bitcoin remains a matter of speculation.

As Anthony Pompliano retorted to Peter Schiff:

Who will “Libra” serve?

With one of the largest networks of people in the world, Facebook’s has a competitive advantage for a company wanting to provide global financial services. The company secured $10 million apiece in funding from major backers like Visa, Mastercard, Paypal, and Uber and is setting up a conglomerate to govern its network. The remittances industry alone totaled $689 billion in 2018, according to the World Bank, and could be a service Facebook aims to provide.

Related: PayPal, Mastercard, Visa, Uber and Stripe investing in Facebook’s new cryptocurrency

On the other hand, one could argue that “Libra” targets an audience never intended to be served by a decentralized currency like Bitcoin. Bitcoin adoption has traditionally been more widespread among the black and gray markets.

Daily use of Bitcoin remains rare in large parts of the world and merchants interviewed by Mashable who accept Bitcoin report infrequent usage and difficulty adjusting to price volatility.

A war for adoption

Could the Winklevoss twins be squaring up for a battle over merchant adoption of cryptocurrency between Bitcoin and Zuckerburg’s “Libra?” Documented in the 2010 movie “The Social Network,” the infamous lawsuit over who invented Facebook may have sparked a war that is not yet over.

A new partnership between payments startup Flexa and the Winklevoss twins’ Gemini exchange could change that. Flexa leverages the scanners used by major retailers to facilitate cryptocurrency payments to major retailers via its Spedn app.

The service makes it possible for people to pay for purchases with companies like Whole Foods, Nordstrom, and Regal Cinemas using Bitcoin, Bitcoin Cash, Ethereum, and Gemini Dollar. Customers can pay cashiers in crypto using the app without revealing the currency to the cashier and merchants can choose to accept payment in cryptocurrency or fiat.

Laura McCracken, Facebook’s head of financial services and payment partnerships for Northern Europe confirmed that a white paper with more details about the project will be released on June 16.

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Seth Goldfarb

Seth Goldfarb

Coordinator @ PNW Blockchain

Seth is a Seattle-based writer who helps businesses using blockchain tell the stories of their success. His work has been published in CryptoSlate, Hacker Noon, and Coin Review and clients have included Evernym and Aave. Seth also maintains a calendar of Seattle-area blockchain events at www.pnwblockchain.com.

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