Will Facebook's Libra Globalcoin be successful

Facebook coin: what investors should know about "Libra"

Cryptocurrencies: Whether you like it or not - the Facebook coin is coming. The data octopus' entry into virtual currency will have a significant impact. From Gerd Weger

According to rumors from several sources, Facebook will soon publish a whitepaper containing a detailed description of how the mysterious cryptocurrency project, internally called "Libra" by Facebook, works.

This is most likely a so-called stable coin. This is the name given to a virtual currency that is linked to one or more assets from the "real world". The most common are stable coins that are directly linked to major currencies such as US dollars or euros. The value development of stable coins has no momentum of its own as with Bitcoin and Co, but precisely reflects the value development of the respective asset. Therefore, the issuer of the stable coins issued should also have deposited the corresponding amount of real assets as collateral. In the past, however, there were justified doubts about the crypto currency Tether as to whether it was really completely covered by deposited US dollars.

Special features of the Facebook coin

There are some plausible assumptions about the Facebook coin, which is often called GlobalCoin. So it should be linked to several global currencies. It could thus act as a counterweight to national currencies, especially in developing countries that are suffering from creeping or galloping devaluation.

Allegedly, the Facebook Foundation is supposed to lead the project. This would make it very powerful and could even grow into the function of a central bank. There is also some speculation that there could be interest on the Facebook coin. Because the money would have to be parked with the American central bank FED, which currently pays 2.35 percent interest on the money deposited with it by partner banks. If Facebook did not then - at least partially - pay out this money to the coin holders, a shit storm could easily break out. Transactions with the coin should be free.

The effects

The Facebook coin would have significant real-world implications. Discussions about the way to Facebook world domination would increase. The GlobalCoin would have what it takes to become a kind of world reserve currency. Serious estimates are currently around 25 million Bitcoin users worldwide. In contrast, the number of Facebook users is approaching the 2.5 billion mark. That is why large payment service providers such as Visa, Mastercard or Paypal should also support Facebook's crypto project.

By the way: There would also be effects on the Facebook share. The coin could become a completely new source of income for Facebook alongside the advertising business. A Barclays analyst has already forecast additional earnings of up to $ 19 billion by 2021.

However, as is often assumed, the Facebook coin would not compete with Bitcoin. On the contrary. A GlobalCoin could increase the number of Bitcoin users, which is currently around one percent of Facebook users. Because the Facebook coin will also be tradable against the most important crypto currencies, above all Bitcoin.

This could encourage many Facebook users who had nothing to do with cryptocurrencies to invest in Bitcoin and Co. In the medium and long term, this could lead to significant increases in the Bitcoin rate.

Because: In contrast to Facebook's Global Coin, the Bitcoin offer is strictly limited. A flight of many people from their secretly or openly inflated or regulated "real" currencies does not work with the GlobalCoin with its link to the traditional currencies. With Bitcoin, on the other hand, yes - at rising prices.