MEXICO CITY, MX / ACCESSWIRE / October 1, 2019 / The arrival of Bitcoin a decade ago was hailed as a landmark moment in the history of money, with proponents of the original cryptocurrency prophesying that it would democratize finance and change the banking system forever. However, the proliferation of digital coins since then has made no dent on the financial services industry, and cryptocurrencies remain a niche market, used predominantly for speculative trading. When Facebook announced in June it would be launching a digital coin called Libra, much was made of the project’s ambition to deliver “a simple global currency and financial infrastructure that empowers billions of people.” This time, analysts are not dismissing outright the threat to traditional banking because of the sheer reach and resources of Facebook and its partners, according to the leading forex broker Pablo Soria de Lachica. Moreover, commercial banks are already feeling pressured due to the meteoric rise of fintech companies, which are mostly unburdened by physical locations and operate far more efficiently and cost-effectively. Libra is set to debut in the first half of 2020, but analysts and economists are already discussing its potential to become a game-changer.
Libra stands better chances of widespread adoption because it will function as a stablecoin, meaning that its value will be pegged to some stable fiat currencies and low-risk securities. This will eliminate the wild price fluctuations typical of most existing digital coins, giving people the confidence to use Facebook’s cryptocurrency in everyday transactions, Pablo Soria de Lachica explains. Despite this, virtually no one believes that Libra will spell the end for traditional money and ruin banks even if it becomes widely adopted. It can, however, massively impact the market share and profitability of financial services providers. “Libra is the first digital global currency that will potentially be used by billions of users around the world. If successful, it will likely take significant amounts of money out of the bank depository systems into the Libra network and may also be used for large fund movements that banks have no visibility into. This means banks will earn much less revenue on bank and payment fees, interest income, and more.” Gartner research VP Avivah Litan told ComputerWorld. Writing for the Financial Brand, Jim Marous also notes, “Since Facebook has a relationship with 7 million advertisers and 90 million small businesses, the potential of using data is significant. The combo of Libra and Calibra [Facebook’s digital wallet] allows the social network to provide loans, credit, money transfer, and e-commerce with the simplicity that it currently allows for P2P communication.”
While removing the intermediaries in the financial system will hugely benefit consumers, there are certain issues, which may prevent Facebook’s project from achieving its goals, Pablo Soria de Lachica points out. For one thing, there is strong government opposition both in the United States and Europe, with legislators highlighting the lack of regulation in the cryptocurrency space and Facebook’s dismal history of data protection, among other troubling matters. At a recent hearing on Capitol Hill, Maxine Waters, chair of the House Financial Services Committee, said, “I have serious concerns with Facebook’s plans. If [they] come to fruition, the company and its partners will wield immense economic power that could destabilize currencies and governments.” At this point, political opposition seems to stem more from unease over the overwhelming influence of technology giants such as Facebook, Google, and Amazon rather than worries about Libra replacing traditional money.
Pablo Soria de Lachica graduated from Universidad Tecnologico de Mexico (UNITEC) with an MBA, going on to specialize in international trading and ultimately become one of the most prominent forex experts globally. His extensive experience allows him to maximize profits for his clients by combining professional guidance and educational projects. He is currently collaborating with Kartoshka – a company bringing the latest technologies in sales, telemarketing, and customer support.
Pablo Soria de Lachica – Foreign Exchange Specialist: http://PabloSoriaDeLachicaNews.com
Pablo Soria de Lachica Compares Facebook’s Cryptocurrency Project, Libra, to Bitcoin: https://finance.yahoo.com/news/pablo-soria-lachica-compares-facebooks-020000159.html
Pablo Soria de Lachica Reviews the Main Features of Facebook’s Libra Cryptocurrency: https://www.marketwatch.com/press-release/pablo-soria-de-lachica-reviews-the-main-features-of-facebooks-libra-cryptocurrency-2019-08-25
SOURCE: Pablo Soria de Lachica
View source version on accesswire.com: