This article comes fromWSJ, by AnnaMaria Andriotis, Liz Hoffman, Peter Rudegeair, and Jeff Horwitz

Odaily Translator |

Odaily Translator |

According to the "Wall Street Journal", Facebook is planning to cooperate with a number of financial companies and online e-commerce companies to prepare to launch a cryptocurrency-based payment system based on its world's largest social network. The Wall Street Journal quoted sources as saying that Facebook's cryptocurrency payment system project has been in secret for more than a year, and the project name is "Project Libra."

With the addition of Visa and MasterCard, it will undoubtedly help Facebook expand its cryptocurrency to more users. Facebook users can not only purchase goods on social networks, but even on the entire Internet. Not only that, Facebook also plans to embed this payment system into third-party websites and apps, just like many websites and apps can log in directly with Facebook accounts.

Of course, it’s not “news” that Facebook plans to launch a cryptocurrency, because as early as December last year, Bloomberg reported that they would be based on a blockchain (it’s unclear whether it will be a private chain or a public chain). A digital currency anchored to fiat currency, and uses this cryptocurrency in the WhatsApp application, allowing users to send and receive funds between each other. It is reported that Facebook's cryptocurrency - tentatively called "Facebook Coin" - may not only be anchored to the US dollar, but will choose multiple fiat currencies for a "basket" of foreign exchange reserves.

It is undeniable that Mark Zuckerberg is very aware that payment and privacy e-commerce will determine the future of Facebook, and their "Project Libra" project will use cryptocurrencies to push e-commerce to a whole new level. When there is cryptocurrency, Facebook users can transfer directly from the buyer's mobile wallet to the seller's wallet, that is, there is no exchange rate difference, and there is no transaction fee. Social networks are incorporating instant messaging and e-commerce, and consumers' shopping convenience will be greatly improved. In this process, traditional payment can no longer meet market needs and must be realized through encrypted currency/digital currency.

Zuckerberg believes that if cryptocurrencies are used on Facebook's various apps, it will drive more brands to advertise on its platform, and once users adapt to Facebook's payment function, it will also bring them New financial services revenue streams. Henry Liu, a former Facebook employee and current managing partner of YGC, an enterprise-level blockchain investment firm, said:

"Payments and e-commerce will be the only way out for Facebook, they need to move away from the current slightly backward freemium and advertising business model."

So, why does the "Project Libra" project cooperate with traditional financial companies?

In fact, the popularity of cryptocurrencies is still not high today, let alone popularized in daily payment transactions, and the traditional financial system is full of deep-rooted conflicts of interest and technical obstacles. Therefore, Facebook needs to cooperate with traditional financial companies and allow users to earn rewards based on their activities on its platform.

However, Facebook also has its own advantages.

Facebook now owns Messenger, WhatsApp and Instagram, three heavyweight instant messaging applications, and how many users do these three applications have in total? The answer is a staggering 2.7 billion! That means roughly one in three people in the world use Facebook products, and they all need to buy things.